Aaron Filbeck a Managing Director from the Chartered Alternative Investment Analyst Association (CAIA) spoke to Nicsa’s Alternative Investments Committee on recent thought leadership issued by CAIA. Aaron is a frequent speaker and writer on various topics of alternative investments and his work has been published in CAIA’s educational programs, numerous academic journals, books, and industry publications.
CAIA focuses on education, transparency and raising ethical standards in the alternative investments sector. The CAIA recently issued a thought leadership paper on the Total Portfolio Approach. Total Portfolio Approach
The Total Portfolio (TPA) Approach is a relatively new strategy in the institutional asset management space and is still evolving. It shifts the focus from the strategic asset allocation to opportunity costs, tradeoffs, and optimization.
Issues with the strategic asset allocation approach include the blurring between traditional and alternative assets and the difficulty modeling overlapping asset classes. The shift towards TPA in asset management involves looking at an organization’s portfolio as a whole rather than focusing on short-term returns. The importance of a long-term focus, overlay risk management, a strong management team and objective definitions are pillars to success for this evolving strategy.
Navigating non-traditional avenues for portfolio growth has become top of mind for many investors. The alternative investment industry has seen tremendous growth and diversification, and currently represents 22 percent of total AUM.
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