CAIA CAIA Alternative Investment Vehicles 2

Question 1

What distinguishes a closed-end fund from an open-end fund in the context of alternative investments?

Accepted Answer

Closed-end funds issue a fixed number of shares and trade on exchanges

Answer

Closed-end funds raise a fixed amount of capital through an IPO and shares trade on secondary markets, potentially at a premium or discount to NAV.

Question 2

Which vehicle allows accredited investors to gain exposure to private equity without the long lock-up of a traditional PE fund?

Accepted Answer

Interval fund investing in PE secondaries

Answer

Interval funds investing in PE secondaries offer periodic liquidity windows, reducing the typical 10-year lock-up associated with direct PE fund commitments.

Question 3

A co-investment opportunity in private equity refers to:

Accepted Answer

An LP investing directly alongside the GP in a specific deal outside the main fund

Answer

Co-investments allow LPs to invest directly in specific deals alongside the GP, typically with reduced or no fees on that co-invest capital.

Question 4

Which structure is typically used for infrastructure investments requiring long-dated, stable cash flows?

Accepted Answer

Listed infrastructure fund or unlisted core infrastructure fund

Answer

Infrastructure investments are typically held in listed infrastructure funds or unlisted core funds that match the long-duration, stable cash flow nature of infrastructure assets.

Question 5

What is the primary regulatory framework governing private fund advisers with over $150 million AUM in the United States?

Accepted Answer

Investment Advisers Act of 1940 with SEC registration

Answer

Private fund advisers managing over $150 million must register with the SEC under the Investment Advisers Act of 1940 and comply with Form ADV and other reporting requirements.

CAIA - Chartered Alternative Investment Analyst Association Practice Test

CAIA - Chartered Alternative Investment Analyst Association Practice Test

CAIA CAIA Alternative Investment Vehicles 2