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...