Other People's Money with Max Wiethe The Market’s Biggest Whales are Making Huge Changes: Total Portfolio Revolution | Steve Novakovic of CAIA
Jan 13, 2026
Steve Novakovic, Managing Director of Educational Programs at CAIA, shares his insights on the shift from strategic asset allocation to the Total Portfolio Approach (TPA). He highlights the significance of CalPERS' recent changes and discusses the evolving landscape of private markets. Novakovic explains how secondary markets are enhancing liquidity for investors and delves into the friction between hedge fund fees and performance. He emphasizes the necessity of educating retail investors about alternatives and looks ahead to exciting CAIA educational initiatives for 2026.
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TPA Delegates Decision Making To Staff
- The Total Portfolio Approach (TPA) shifts decision authority from boards to investment staff.
- TPA asks boards to set objectives while staff choose allocations and managers to meet those objectives.
How Early Adopters Avoided Legacy Friction
- Early TPA adopters like Australia’s Future Fund launched as TPA from day one and avoided legacy frictions.
- Canada’s CPP also adopted TPA during organizational change, easing the transition.
Boards Benchmark The Big Picture
- TPA replaces granular asset-class benchmarks with a high-level portfolio benchmark like a 70/30 stocks-bonds outcome.
- Boards evaluate total portfolio outcomes rather than frequent class-level performance reviews.