CAIA Level II: Advanced Core Topics in Alternative Investments, 2nd Edition

32.7 COMPARISON OF APPROACHES TO STRUCTURING A CTA INVESTMENT

Exhibit 32.5 consolidates much of the previous discussion into a summary table. It provides answers to the primary questions for the four different categories of investment structures: CTA funds, multi-CTA funds, managed accounts, and platforms. While there are definitely exceptions to the answers in this table, it should serve as a good starting point when considering an investment structure.

EXHIBIT 32.5 CTA Fund, Multi-CTA Fund, Managed Account, and Platform

Where possible, specific answers, such as who appoints directors, are given. When it comes to the cost of resources or the difficulty of a function, simple rankings of low, medium, and high are offered. It is useful to look at these answers together. An investor following the path of managed accounts might not have considered the high cost of maintenance or the problem of limited manager availability. Investors would be well served to have a more thorough dialogue with multi-CTA funds or platforms to see if their structuring needs can be accommodated. Ultimately, if full control of the assets and daily liquidity is necessary, investors may have to accept the costs of a managed account.