The key Alternative Investments formulas and decision rules for 2026, module by module. Alternative Investments is 7-10% of the Level I exam.
Free to read, no sign-up. A revision companion to use alongside your curriculum or prep provider. The full sheet (14 concepts, 5 formulas, 2 decision rules) is in the study dashboard.
The ones to know cold before exam day.
Where: What the investor actually earns
Open the lessonWhere: NOI = Net Operating Income
Open the lessonWhere: Lower cap rate = higher value (lower risk)
Open the lessonKey concepts and formulas from each of the 3 Alternative Investments modules. Open a module for its lesson page, or the dashboard for the full sheet.
Private capital (PE, VC), Real assets (real estate, infrastructure, natural resources), Hedge funds, Digital assets.
Fund investment (LP in fund), Co-investment (alongside GP), Direct investment (own the asset directly).
Where: Typically 1-2% annually
Where: Typically 20% above hurdle
Full sheet: 5 concepts · 3 formulas · 1 decision rules
Early-stage funding: seed, Series A/B/C. High risk, high return. J-curve: negative returns early, positive later.
Acquire company using significant debt. Improve operations, sell for profit. Target: stable cash flows, undervalued assets.
Full sheet: 4 concepts
Direct: own property. Indirect: REITs, funds. Income + appreciation. Cap rate = NOI/Property value.
Real Estate Investment Trusts: traded like stocks. Must distribute 90%+ of income. Liquid exposure to real estate.
Where: NOI = Net Operating Income
Where: Lower cap rate = higher value (lower risk)
Full sheet: 5 concepts · 2 formulas · 1 decision rules
Start with the free module, then add your own notes to every Alternative Investments cheat sheet in the dashboard.