Monetary Matters with Jack Farley The Market’s Biggest Whales are Making Huge Changes: Total Portfolio Revolution | Steve Novakovic of CAIA
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Jan 13, 2026 
Steven Novakovic, Managing Director of Educational Programs at CAIA, dives into the transformative shift to the Total Portfolio Approach (TPA) that major players like CalPERS are adopting. He discusses the implications of this governance change for institutional allocators and how it enables tactical moves in an uncertain market landscape. Novakovic stresses the growing importance of education on private market risks and the rise of secondary markets, while also critiquing hedge fund fee structures, urging investors to rethink what they pay for beta.
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Total Portfolio Approach Changes Governance
- The Total Portfolio Approach (TPA) shifts decision authority from boards to investment staff to meet portfolio objectives.
- TPA lets investment teams be more nimble and opportunistic than the traditional SAA governance model.
TPA’s Geographic Origins
- TPA originated two decades ago in Australia, New Zealand and Canada with funds like the Australian Future Fund.
- Early adopters could implement TPA more easily because some started with a fresh structure or had lifecycle disruptions.
Benchmarking Moves Up A Level
- Under TPA boards use broad, high-level benchmarks like a 70/30 stock-bond outcome rather than granular asset-class benchmarks.
- The board focuses on overall objectives while staff handle detailed performance comparisons internally.