Research

Total Portfolio Approach (TPA)

Total portfolio approaches have been evolved by some leading organisations around the world as a more ‘joined up’ investment philosophy that results in a more streamlined approach to portfolio construction.

 

Total Portfolio Approach cover
Research paper

This paper includes discussions on the findings of a global study into current and future asset allocation practices of leading asset owners, and describes the research investigations being carried out in the Thinking Ahead Institute to take this concept further.
    Roger Urwin of Thinking Ahead InstituteForum post - It’s a drag: why TPA is superior to SAA

A total portfolio approach (TPA) to portfolio construction has been described as a “more joined up” process. Importantly it starts with clearly specified investment goals, there is competition for capital among all investment opportunities, rather than filling asset class buckets, and it is dynamic.
TPA info-graphic

Source: Thinking Ahead Institute
The key to simplifying a complex organisation and understanding its effectiveness is to break it down into its three functional parts:
■ Governance model – organisational structure, resources, decision making, technology
■ People model – talent, culture, employee value proposition, incentives
■ Investment model – beliefs, risk framework, portfolio construction process, systems and tools.