Paper presents research highlighting Alpha Capture programs as a cornerstone of LP access to scalable, sustainable alpha, and designs safeguards to prevent the dilution of manager IP.
Greenwich, Conn. – October 29, 2025 – Today, CenterBook Partners (“CenterBook”), a global leader in Buy-Side Alpha Capture (“AC”), released a position paper, “More Long/Short Fundamental Equity Alpha for All: A Framework for Responsible Buy-Side Alpha Capture.”
Drawing on over a decade of proprietary data from more than 200 long/short fundamental equity (“ELS”) managers, the paper addresses misconceptions around Buy-Side AC and presents a roadmap for responsible integration into institutional portfolios. CenterBook highlights how Buy-Side AC platforms can empower independent managers to remain autonomous while giving more allocators direct access to discernible idiosyncratic alpha.
CenterBook’s research underscores how responsible AC - grounded in data integrity, collaboration, and systematic rigor - can revitalize long/short equity, create new pathways for manager independence, encourage new entrants, and set a new benchmark for alpha generation in institutional portfolios. Further, the paper outlines how AC platforms can implement market impact protections for both participating managers and their investors, drawing on deep execution analytics to trade prudently and monetize mid-to-long term fundamental equity.
Key Takeaways from the Paper Include:
- Sustainable standards: Requires alignment, transparency, fair use, and market impact reimbursement, with platforms responsible for adopting and implementing these practices.
- Mutual benefit: AC platforms aggregate diverse investment signals and enhance portfolio construction, risk management, and capital efficiency for allocators and provide capital-access, monetization and consultative services for managers.
- Alpha revival: Long/short fundamental equity remains one of the most compelling alpha opportunities for a larger constituency of institutional investors when coupled with responsible AC frameworks.
“When we launched CenterBook in 2021, our ambition was to redefine the principles and best practices that underpin responsible medium-to-long-term AC - transparency, alignment, and accountability,” said David Stemerman, Co-Founder, Chief Executive, and Chief Investment Officer of CenterBook. “Being great at stock picking used to be enough. By combining human expertise with systematic portfolio construction and execution, we can empower great managers to stay independent, deliver superior results to investors, and advance the next frontier of the investment industry. Our framework, which drives our fundamental model, is rooted in this new standard for how independent managers and institutional investors collaborate.”
Jay Willoughby Chief Investment Officer at TIFF Investment Management, added: “Premier alpha capture should ensure defined use, true transparency and impact accountability, protecting all LPs.”
CenterBook’s platform systematically captures alpha from the insights of its independent, process-driven Contributor Funds and provides consultative support that enhances each participant’s portfolio construction and risk management capabilities. By uniting human judgment with data-driven precision, the CenterBook platform delivers scalable, differentiated alpha while reinforcing transparency and disciplined risk management across all participants.
Executive Summary
Mid-to-long term fundamental equity long/short (ELS) alpha remains a valuable investment opportunity despite recent challenges faced by traditional managers. Responsible buy-side Alpha Capture (AC) platforms offer a collaborative solution that enhances access to this alpha by aggregating ideas from multiple contributors and applying systematic portfolio construction and risk management.
Challenges in traditional ELS:
Since the Global Financial Crisis, ELS managers have faced fee compression, talent migration, and competition from multi-manager platforms, limiting allocator flows and threatening the traditional ELS business model.
Evidence of persistent alpha:
Analysis of proprietary data shows that mid-to-long term fundamental managers generate durable, idiosyncratic alpha over longer holding periods, which is often obscured by market and factor exposures in traditional portfolios.
Benefits for managers and allocators:
AC platforms aggregate investment ideas from diverse contributors, enabling superior portfolio construction and risk management that benefit both managers and allocators.
Revitalizing long/short equity:
AC has the potential to reinvigorate midto- long term long/short equity strategies, which continue to offer compelling alpha opportunities despite pressures on traditional ELS managers.
Transparency and accountability risks:
While transparency enables aggregation of alpha signals, it also poses risks such as front-running, IP leakage, and market impact; best practices require safeguards including market impact reimbursement and strict data use controls.
Requires industry standards:
Without the adoption of standards, Buy-Side Alpha Capture risks repeating the missteps of past innovations, creating or perpetuating distrust and damaging the very ecosystem it seeks to strengthen.
Principles for responsible Alpha Capture:
Key principles include IP protection, defined data use restrictions, trading controls to minimize market impact, market impact reimbursement, transparency with regular reporting, economic alignment via performance-based revenue sharing, and contributor process enhancement.
Alpha Capture's virtuous cycle:
AC empowers independent managers to remain autonomous while centralizing capital sourcing and risk management, creating a positive feedback loop that supports manager growth, enriches data, and broadens allocator choice.
To explore the full findings and download the position paper, visit CenterBook’s website.
About CenterBook Partners:
CenterBook Partners has built an innovative, Buy-Side Alpha Capture platform that systematically captures alpha from signals provided by its fundamental Contributor Funds. By combining human insight with systematic implementation, CenterBook’s approach is designed to generate superior, scalable returns and advance the investment industry. Its responsible buy-side Alpha Capture platform transforms a multitude of independent investment ideas into a single source of long-term alpha opportunities. CenterBook currently manages $1.3 billion in assets.
