Unpacking the Complexities of Asset Allocation and a Total Portfolio View

The interview was conducted as part of our June 2025 research report, Asset Allocation and Total Portfolio Solutions. We explore the growing relevance of a TPV and the total portfolio approach (TPA) in institutional investing, unpack the challenges asset owners face in adopting this view, highlight key drivers for change, and share why a shift toward holistic investment management is both timely and necessary.

Cutter Research: We’re increasingly hearing about the concept of a total portfolio view — sometimes referred to as a “whole-of-fund” approach. Can we start by unpacking what that actually means and what’s driving the conversation?

Rein: At its core, a “total portfolio view” refers to the ability to aggregate and assess all investment exposures — across asset classes, geographies, and strategies — in one integrated framework. This means shifting from viewing portfolios in isolated silos (equities, fixed income, private markets, etc.) to a single cohesive view of risk, return, liquidity, and impact across the entire fund.

This is especially important for multi-asset portfolios, which are increasingly complex and diversified. Asset owners — especially long-horizon investors like sovereign wealth funds, public pensions, and endowments — are recognizing that without this total view, they risk suboptimal decisions at the enterprise level. And in today’s environment of persistent volatility, geopolitical uncertainty, and increasing demand for resilience and agility, that’s a risk most can’t afford to take.

Q: Understood. But if this is so critical, why is it still such a challenge for firms to implement?

A: It’s a great question — and the answer comes down to three core dimensions: data, process, and technology.

1. Data Management: Multi-asset portfolios involve both liquid and illiquid exposures, public and private market investments, and structured and unstructured data sources. Getting timely, standardized, and reconciled data across all asset types is extremely difficult. Private markets, for instance, often involve lags in valuation, inconsistent reporting formats, and incomplete data sets. This poses a fundamental barrier to achieving a unified portfolio view.
2. People and Process: Many asset owners are organized around asset class silos, with different investment teams managing distinct mandates. These teams may use different performance metrics, risk models, and investment horizons. Often, there is limited cross-team collaboration, particularly if incentives are not aligned across the organization. This fragmented model impedes any attempt to make strategic whole-of-fund decisions.
3. Technology Infrastructure: Many investment platforms are still rooted in legacy systems that were not designed for whole-of-fund visibility. They typically model portfolios in a hierarchical structure tied to individual mandates. To compensate, firms often lean on spreadsheets or generic BI tools, but those have limitations in terms of scalability, auditability, and real-time analysis. Increasingly, firms are seeking more sophisticated front-to-back investment platforms or portfolio construction tools that can support TPA-like views and workflows.

Q: So, we’ve covered why a total portfolio view is hard to achieve. But when we think about strategic asset allocation (SAA), that’s already a whole-of-fund concept. What’s really different now?

A: You’re absolutely right. SAA has long been the cornerstone of institutional investing. But a total portfolio approach represents an evolution in how capital allocation decisions are operationalized and executed.

Whereas SAA typically sets broad long-term targets for each asset class, TPA seeks to dynamically allocate capital at the total fund level based on current market conditions, risk-adjusted opportunities, and top-down themes — all while maintaining alignment with the fund’s long-term objectives.

The key difference lies in integration and agility. TPA emphasizes continuous evaluation of opportunities across all asset classes, rather than sticking rigidly to preset allocation bands. It promotes collaboration across investment teams, objective-based investing, and an enterprise-wide risk lens. This is particularly appealing to large asset owners with the governance maturity and operational scale to handle such a shift.

Q: What’s driving firms to consider a TPA model now?

A: Several key forces are pushing asset owners in this direction:

1. Greater Focus on Total Fund Objectives: Long-term investors increasingly aim to align portfolio construction with mission-related outcomes, such as meeting future liabilities, intergenerational wealth preservation, and sustainability goals. TPA helps translate these into actionable cross-asset strategies.
2. Improved Risk and Liquidity Management: In the TPA model, you get a more comprehensive understanding of risk concentrations and liquidity mismatches, which are often obscured in siloed models. This is essential in times of market stress, when having a consolidated view can make or break decision-making.
3. Avoidance of Redundancy and Inefficiency: TPA helps reduce overlapping exposures, duplicated costs, and cash drag by optimizing capital deployment across the entire fund, not just within mandates.
4. Faster Tactical Response: Whether it’s taking advantage of market dislocations, hedging systemic risks, or implementing macro views, TPA enables greater responsiveness — something traditional SAA models often lack.
5. Technology and Analytics Maturity: Finally, advances in data architecture, cloud-based analytics platforms, and scenario modeling have made it more feasible than ever to implement a TPA framework.

Q: Do you think this model will become more mainstream?

A: I do. While some firms might see it as too significant a shift — particularly those with entrenched investment structures or legacy systems — I think we’ll increasingly see TPA principles embedded into investment processes even if a full transition isn’t feasible right away.

For example, firms might start by adopting a “collaborative investment committee” model where public and private market teams coordinate on capital deployment. Others may integrate total fund liquidity monitoring or adopt unified dashboards for cross-asset risk analytics.

Even partial moves in this direction can yield benefits. As governance frameworks mature and technology continues to improve, I expect that TPV — and ultimately TPA — will become not just differentiators, but a necessity for sophisticated institutional investors.

To learn more, check out our June 2025 research report, Asset Allocation and Total Portfolio Solutions.

How Can We Help?

Cutter Associates serves the operational and technology needs of the global asset and wealth management industry. We have helped some of the largest investment management firms around the world achieve business value from every process, realize strategic opportunities, keep pace with the competition, and stay ahead of the technology curve. Whatever your challenge, we can work with you to have a lasting impact — enabling your growth strategy for years to come. Contact us at [email protected].