The Pure Alpha research asks a basic manager-selection question: how much of an active strategy's result can be explained by systematic exposures, and how much remains attributable to differentiated active decisions?
Core idea
Raw outperformance alone does not identify skill. A portfolio can benefit from style, sector, factor, or market exposures that could potentially be obtained elsewhere. The framework therefore decomposes those exposures before evaluating the residual return.
Published papers
- Pure Alpha: Evaluating Active Management in a Modern Way (2022)
- Pure Alpha II: A Framework for Active Manager Evaluation (2023)
Why it remains relevant
The same underlying question—what can be explained or replicated versus what remains differentiated—continues to inform how I think about investment discovery and portfolio decisions.