Alpha Theory™ Portfolio Management Platform

Welcome to Alpha Theory™

Alpha Theory™ cures the most pervasive problem that fundamental investors face; their portfolios do not accurately reflect their underlying research. Fundamental investors make money by building a portfolio of assets that have greater potential upside than downside. To maximize a portfolio's overall potential return while minimizing risk, investors must use each asset's risk-adjusted return to determine the appropriate position size. Risk-adjusted return is the only way to ensure that a portfolio accurately reflects the underlying research. However, a majority of investors do not utilize risk-adjusted return to size positions. Instead, they rely on rapid-fire mental calculations to manage a portfolio of constantly changing risk/rewards, asset qualities, and position sizes.

Alpha Theory™ is a patent-pending Fundamental Portfolio Management Platform, created by a hedge fund, that gives investors a real-time framework to distill each asset's research into a risk-adjusted return that is then used as the foundation to maximize risk-adjusted return for the entire portfolio. One inefficiently sized position can cost a fund millions of dollars and several inefficiently sized positions can put a fund out of business. As a result, the discipline of determining position size based on risk-adjusted return is the closely guarded secret and competitive advantage of some of the largest, most successful investors in the world. Alpha Theory's™ solution enhances that competitive advantage by combining the innovations and best practices of hundreds of portfolio managers, analysts, investment advisors, and other investment professionals into one portfolio management framework and overcomes the alpha-destroying effects of inefficient position sizing that plague fundamental investing today.

"Economics...has not truly come to grips with the main difficulty, which is the inordinate practical importance of a few extreme events" - Benoit Mandelbrot, mathematician, A Multifractal Walk down Wall Street

For more information, see Alpha Theory's™ Product Info Sheet | Consulting Services | Risk-Adjusted Return Calculator.

Is Alpha Theory™ right for your firm?

1) Would it be helpful to centralize valuation work, expectations, analyst recommendations, and notes?
2) Should an asset's risk-reward be a primary factor in determining position size?
3) Has emotion ever led to poor decision making?
4) Would it be helpful to have a repeatable way to adjust position size as prices and fundamentals change?
5) Would it be difficult to immediately identify the 10th best idea in your portfolio?
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WHAT THEY'RE SAYING

Scott Dooley, Fusion Global Investment Group - Long/Short Equity Hedge Fund

"Alpha Theory is an integral part of our investment process, instilling a disciplined systematic approach to managing position size using a risk-adjusted return framework. It has greatly increased our operational efficiencies, enhanced risk management and ensures our largest positions line up with our best ideas. Accordingly, this has led to improved fund performance and increased our alpha over benchmarks. I unequivocally recommend Alpha Theory to any investment manager seeking higher returns"