Fund ExplorerIndicesInsightsVideosPricing

Alpha Generation: Equity Generalists vs Sector Specialists

And the winner is?

Nicolas Rabener
10 min read
29 May 2023

SUMMARY

  • Neither equity generalists nor sector specialists have generated alpha on average
  • There is no consistency in alpha generation by either type of fund manager
  • The most consistent alpha generators produced no alpha out-of-sample

INTRODUCTION

When I joined Citigroup as an analyst in their mergers & acquisitions department in 2005, my career trajectory was to either become a sector specialist or a country generalist investment banker. The former would mean that I pick a sector like pharmaceuticals and advise companies within that on their M&A, IPOs, and financing options. The latter entailed the same work, but focus across sectors within a certain geography like the UK or Germany.

Keep reading with Institutional

Includes the full research library of 400+ articles, plus Returns Analyzer and Risk Analytics for return and risk contribution analysis.