Building Resilience: CAIA's Long-Term Business Model

PUBLISHER NOTE: This contribution comes from John L. Bowman, CFA Senior Managing Director at CAIA Association. 'Everyone has a plan until they get punched in the mouth' (Mike Tyson), but how do you plan on taking that inevitable punch, getting off the mat, and moving on toward that north star. Follow John on Twitter @BowmanJohnL

Resilience has historically been defined as a substance’s ability to return to its original form after being stretched or compressed. Stand firm in a storm, wipe the brow in relief, and then resume normal operations. When it comes to business strategy however, resilience is better characterized by the ability to adapt or evolve amongst adversity, hardship or threats. In the face of a global pandemic, workforce dislocation, income inequality, scarcity of resources, climate change, and social unrest, the courage and disposition to continually reimagine your business model may be the most critical modern leadership trait.

At CAIA Association, our mission obligates us to acclimate to a dynamically changing world and investment profession. As the professional body for the alternative investment industry, we are committed to providing world class education and thought leadership, improving transparency, and raising ethical and professional standards, all to ensure underlying investor’s interests are paramount. These pledges are not dependent on external circumstances remaining constant or static. Rather, our organizational blueprint must be future proofed for a myriad of disruptive social and industry forces. Indeed, even beyond the immediacy of the virus, we are experiencing tectonic shifts towards the private markets in capital formation, rapid democratization of alternative asset access through digital aggregators and tokenization, a generation defining regulator debate over liberalizing the definition of “eligible investor” for private offerings, and ever increasing allocations from asset owners to non-traditional asset classes. 

We need to build a resilient CAIA Association to weather this tsunami of change.

This new resiliency takes several forms:

• Content resiliency as continuous refreshing of the curriculum results in a more relevant learning experience and outcome. Every indication suggests alternatives will remain the fastest growing segment in the industry and the pace of change is only accelerating. The need for thorough and effective training in these asset classes has never been more important. We have built a formal network of allocators and managers to help steer the composition of the program and have re-engineered our production process to ensure CAIA remains the go-to canon for the industry.
• Climate resiliency as a thoughtful transition to online learning, examinations, and grading will lower our carbon footprint and reduce our contribution to deforestation. At a recent quarterly earnings call, Microsoft CEO Satya Nadella claimed that “we have seen two years of digital transformation in two months.” Significant capital and resource allocation to more captivating learning experiences and online proctored high-stakes examination applications are opening new frontiers for CAIA to create a more sustainable and customer-friendly experience. See our recent press release on the September 2020 cycle.
• Workforce resiliency as new digital solutions for content digestion and “events” as well as a proliferation of new test centers around the world counterbalances the risk of further labor dislocations, social unrest, and the future of distributed work. This improved accessibility to our program and thought leadership is also aimed at neutralizing socioeconomic, gender and racial inequalities that still inhibit strong diversity in the industry.

We are well aware that professional credentialing has never been the poster child of innovation. In fact, it’s been a fairly entrenched set of activities for decades with a tendency towards herd behavior versus differentiation. As we’ve stated before, we are more concerned with standing out than fitting in, given our very unique educational experience that places the candidate in the cockpit of the capital allocator. With these aspirations and obligations, neither the fearful ostrich with her head in the ground nor the passive kite dancing in the hurricane are healthy responses to this torrent of dislocation. Great leadership must seize the moment, make decisions with incomplete information, and ensure the business is positioned strongly for the medium to long term. We are not lobbying for foolish bravado at the expense of exam integrity, for that is and always will be our north star. But, methodical, informed, and brave transformation must be our new normal. 

We’ll see you on the other side.