The Dispersion Research Series
What You Don't Measure Is Already Costing You
At a Glance
Return spread between top- and bottom-performing institutional portfolios in Q1 2021
Wealth gap created by a 2% annual return difference over a decade on a $500M portfolio
Manager performance spread in private equity versus 2.6% in large-cap equities
The Research Behind the Framework
Most institutional performance evaluation relies on policy benchmarks and peer rankings. Neither tells you when gaps are forming, why they’re forming, or how much of the available opportunity your portfolio is actually capturing. This research series addresses all three questions.
THE PROBLEM:
The Dispersion Trap:
The Wealth Gap Forms Fast; Many Portfolios Never Recover
Institutional portfolios form permanent wealth gaps during high-dispersion periods, and the recovery rarely comes. This paper shows how timing matters more than most investment committees realize.
Read The Dispersion TrapTHE DIAGNOSIS:
The Implementation Gap:
Manager Selection Is the Key Driver of Institutional Returns
The reason performance gaps form isn’t allocation; it’s implementation. Manager selection within alternatives is now the dominant driver of dispersion, not the decision to allocate to alternatives in the first place.
Read The Implementation GapTHE MEASURE:
The Dispersion Capture Ratio:
Measuring the Value of Your Implementation Quality
Now that we understand the problem and what’s causing it, how do we put a value on implementation quality? The Dispersion Capture Ratio evaluates performance as a percentage of the observable opportunity set.
Read The Dispersion Capture RatioThe Research Proved the Problem Exists.
OCIO Analytics Gives You the Tools to Measure It.
Two new modules now available on the OCIO Analytics platform
Dispersion Capture Ratio (DCR)
See how much of the available opportunity your portfolio captured in any given period, expressed as a percentage, not quartiles.
What it tells you:
- Your DCR score across historical dispersion environments
- How much value was captured versus left behind
- How your DCR compares during high and low dispersion periods
Dispersion Level
Understand the size of the opportunity set your portfolio operated in and whether the dispersion environment you faced was high, normal, or low relative to historical norms.
What it tells you:
- Whether current dispersion is elevated relative to history
- How much your implementation decisions actually mattered in any given period
- When the periods of greatest consequence occurred in your portfolio’s history
“Dispersion Capture Ratio is the only framework that calculates what implementation was worth—and what opportunity remained available—in basis points.”
– Brad Alford, Founder,
OCIO Analytics
See Your Portfolio's DCR Score
Book a 20-minute demo and we’ll show you how much of the available opportunity your portfolio captured across the dispersion environments that mattered most.
