What is true alpha, and how can it be generated across different asset classes? This was one of the key questions discussed at the Asset Management Conference, where CVI was a partner. Elżbieta Winnik, Investment Director at CVI, joined a panel on alpha generation alongside representatives from different segments of the investment market.

One of the central themes of the discussion was how the definition of alpha varies across asset classes. From a private debt perspective, generating returns above WIBOR or EURIBOR does not necessarily mean generating alpha. Part of that excess return represents compensation for credit risk and the illiquidity of investments.

The real value added by an investment manager comes from effective deal sourcing and selection, rigorous credit underwriting, and appropriate financing structures. These capabilities enable managers to achieve higher returns without a proportional increase in risk.

The key takeaway? The same nominal return does not always reflect the same quality of investment performance. What truly matters is the level of risk taken to achieve it.

We would like to thank the organizers, Investor’s Club, and all panel participants for an insightful discussion and the opportunity to exchange perspectives.