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Partners Capital launches low-cost active endowment style multi-asset class portfolio for large institutions

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Partners Capital has announced the launch of a new strategy called The Efficient Alpha Portfolio (TEAP), a carve-out of the firm’s core investment model, which aims to deliver a low cost diversified multi-asset class solution for large institutions.

Stan Miranda, CEO and Founder of Partners Capital, says: “Partners Capital’s investment philosophy is rooted in a long-term, multi-asset class approach to investing as practiced by some of the leading endowments and foundations. We seek to earn excess returns by our risk-based portfolio construction approach that focuses on harvesting risk premia (beta) across markets as cheaply as possible and paying manager fees only where potential outperformance (alpha) truly justifies it. That has us paying relatively high fees to a select group of alternative asset managers who we believe, despite the fee load, can generate significant outperformance. However, TEAP will be a carve out of this core investment model and focus exclusively on a portfolio of low-cost managers that aim to deliver outperformance by either systematising alpha strategies (allowing them to charge lower fees) or providing their strategies at “fair fees” that are aligned with client interests.
 
Arjun Raghavan, a Partner and head of Portfolio Construction at Partners Capital, adds: The TEAP Strategy will incorporate all aspects of the classic Partners Capital investment model, including its proprietary risk-based portfolio construction philosophy and tactical asset allocation approach.  The overall look-through manager fees for TEAP will be below 1%. Therefore, you can think of this portfolio as sitting between a passive portfolio and the full fee Endowment Model. We would regard the TEAP strategy as more attractive than a passive portfolio which by definition will underperform net of the cost of the tracker fees and trading costs.”

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