Portable Alpha

August 2026

Most investors treat alpha and beta as inseparable: hire an active manager and accept whatever market exposure comes with the mandate.

Portable alpha challenges that assumption. By obtaining market exposure through derivatives and allocating capital to managers operating anywhere in the investment universe, investors can pursue excess return without being confined to a single asset class or strategy. The approach also changes the test that active return must pass. Rather than requiring a manager to beat a market benchmark, portable alpha requires the alpha source to exceed the cost of financing the beta exposure. That is a different question, and it is the one this paper returns to throughout.