What Is Portable Alpha?

Wed Jun 1, 2005


 


Institutional investors are starting to enter the hedge fund market in earnest and, in the US in particular, portable alpha is becoming a popular solution.

Niki Natarajan, InvestHedge
 
Portable alpha as a concept has been around a relatively long time, but it is gaining a newfound popularity, among the institutional investor community that is starting to enter the hedge fund market. Most of them are trying to find ways to add returns to their portfolios in a fashion easily explainable to their trustee boards.

A paper written by Grant Gardener and Mike Thomas of Russell Investment Group concludes that portable alpha strategies are appealing because they allow the investor to combine market exposure that best achieves a target rate of return with access to the richest sources of active management.

While I think this explains why the process is popular, I am keen to de-mystify exactly what it is? How...

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