Organizational Alpha: How to Add Value in Institutional Asset Management

Institutional investors spend the majority of their time in search of the Holy Grail of investment alpha, or risk-adjusted market outperformance. The problem is far too many organizations and funds fail to first understand whether or not they have what it takes to earn alpha or whether it even makes sense to try. Organizational alpha, on the other hand, is something every institutional investor and nonprofit can achieve, assuming they focus on what they can control and what matters.

This book will show institutional investors, board members, trustees, consultants and beneficiaries how the concept of organizational alpha can help them:

• Recognize the importance of goals-based investing.

• Think in terms of process over outcomes.

• Understand the fiduciary duty and what constitutes a breach of that duty.

• Know the difference between a governing and managing fiduciary.

• Define their overarching investment philosophy.

• Make sense of the group dynamic at play when making decisions-by-committee.

• Ensure more continuity in their investment program.

• Improve their due diligence and decision-making processes.

• Choose the right consultant or advisor to help oversee their assets.

• Find additional sources of alpha.

• Understand the alternative investment landscape.

• Appreciate the differences between foundations, endowments, and pensions.

• Document their investment process to cut down on unnecessary mistakes.

• Make decisions that revolve around the goals and mission of the organization.

• Set realistic expectations with the understanding that the future is always uncertain.

Written by an institutional investor who has spent his entire career working with a wide range of institutional investors from endowments to foundations to pension plans to family offices and other nonprofits, Organizational Alpha is a manual that provides institutional investors with the tools they need to find success in the markets and as organizations.

Ben Carlson, CFA is the Director of Institutional Asset Management at Ritholtz Wealth Management. He has spent his career working with various nonprofit, institutional and high net worth clients to help them plan and invest their money wisely. He is the author of the book A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan and is the author of the blog, A Wealth of Common Sense.