The extra kicker - adding alpha to liability-driven investments

portable alpha

A larger number of UK pension plans face funding shortfalls which are only being exacerbated by rising liability costs. Portable alpha strategies, which 'port' the added value or 'alpha' generated by one asset onto a benchmark asset to generate additional investment returns, can provide a solution to this dilemma.

In order to test the efficacy of these strategies, it is necessary to develop a control portfolio that provides a realistic representation of the positioning of many UK pension fund