formula-sheet

CFA Level I Alternative Investments Formula Sheet

Public formula sheet for cap rates, NOI valuation, fund fees, and commodity return components.

TL;DR

Alternative Investments formulas are practical valuation and fee calculations: cap rate, NOI value, management fees, incentive fees, and commodity return components.

Formula Reference

Cap rate

Cap rate = NOI / value

Rearrange to value = NOI / cap rate.

Management fee

Management fee = fee rate x assets under management

Use beginning, ending, or average assets as specified.

Incentive fee

Incentive fee = incentive rate x eligible gains

Check hurdle and high-water mark rules.

Commodity total return

Total return = spot return + roll return + collateral return

Roll return depends on futures curve shape.

BA II Plus Keystrokes

Use division for cap-rate valuation.
Use STO/RCL for fee base and hurdle value.
Sum return components after checking signs.

Worked Example

NOI = $900,000 and value = $12,000,000.
Cap rate = 900,000 / 12,000,000 = 7.5 percent.
If cap rate falls, value rises for the same NOI.

Common Mistakes

Using gross rent instead of NOI.
Applying incentive fees to total assets rather than eligible gains.
Reversing contango and backwardation effects.

Related Guides

CFA Level I Alternative Investments Calculations - Real estate, private equity, hedge fund fee, commodity, and infrastructure calculations.
BA II Plus: IRR Calculation Step by Step - Exact BA II Plus workflow for calculating IRR from uneven project cash flows.
Time-Weighted vs Money-Weighted Return - Compare TWR and MWR with formulas, examples, and CFA Level I interpretation rules.