In our earlier paper we introduced the principles behind TPA and explored practical implementation, particularly within Private Markets, where illiquidity, long fund lives, limited transparency, and evolving opportunity sets make total portfolio decision-making especially challenging. We also introduced the concept of ‘minimum viable TPA’ to illustrate that meaningful progress applying this approach does not require a wholesale redesign of an institution’s governance model. Those ideas formed the foundation for many of the client discussions that followed.

Perhaps the most important conclusion from our subsequent client conversations is that TPA is not a single blueprint. Rather, it is a set of core principles that should be adapted based on an investor’s objectives, governance structure, appetite for delegation, and analytical capabilities. One analogy that consistently resonated with clients was to think about TPA as ‘zero-based budgeting for portfolio construction.’ Instead of beginning with existing allocations and asking what should change around the margin, TPA begins with the investor’s objective and asks a different question: if every investment had to earn its place in the portfolio today, how would capital be allocated? For many institutions, answering that question does not require abandoning existing frameworks. Instead, it means evolving them so that capital allocation decisions can increasingly be made from a total portfolio perspective.

Against that backdrop, this paper addresses some of the questions that emerged most frequently from clients as they begin translating the principles of TPA into practical portfolio construction decisions.

  1. Does adopting TPA mean abandoning asset allocation? TPA retains asset allocation as an investment input, while moving beyond the traditional Strategic Asset Allocation governance and operating model.
  2. Is TPA only relevant for investors seeking greater flexibility? No. TPA can benefit investors seeking more structure just as much as those seeking more flexibility.
  3. Can we recommend a ‘checklist’ for adopting TPA? Implementation should begin with the investment objective, not the checklist.
  4. How are risk factor frameworks best used under TPA? Effective risk management requires both broad and granular perspectives.
  5. What are best practices for Private Markets investing under TPA? Private Markets remain one of the most challenging, but potentially rewarding, areas for implementing TPA.