Better than Alpha: An optimal way to think about alpha

BETTER than Alpha: Three Steps to Capturing Excess Returns in a Changing World, by Christopher M Schelling, is a valuable resource for investors and practitioners seeking a more thorough understanding of alpha, including what it is, how to identify it and what they should be focusing on instead.

Schelling is head of the US-based investing firm Windmuehle Funds and former director of private equity investing for the Texas Municipal Retirement System.

The author's 3-step framework of behaviour (policy setting and strategic allocations); process (manager selection and tactical allocation); and organisation (types of authority, oversight/attribution, and delegation) provides an optimal way of thinking about alpha.