The concept of the Total Portfolio Approach (TPA) has gained significant momentum in institutional investment circles. On July 1, 2026, CalPERS became the first large U.S. public pension fund to implement the investment model, joining a growing list of global pension and sovereign wealth funds.
TPA is also entering the lexicon of private wealth management. A June 2026 report from the Bank of Singapore CIO Investment Institute, Whole Portfolio Approach for Wealth Investors, featuring perspectives from the CAIA Association and other contributors, outlines how total portfolio principles can be applied in private wealth management. One factor driving growing interest in TPA across institutional and individual channels is the expansion of private markets and the need to incorporate them more effectively into overall portfolios. The CFA Institute Research Foundation raised this point in the introduction to its literature review on the Total Portfolio Approach.
Within a conventional Strategic Asset Allocation (SAA) framework, a single “alternatives” label can no longer adequately describe the underlying mix of strategies, risks, and return drivers. As private markets have expanded, so has the importance of understanding the overlap between the economic exposures of privately financed businesses and assets and those found in traditional public markets. Without careful analysis and selection, an investor’s alternatives allocation may provide considerably less diversification or risk mitigation than its label suggests.
The investment community is responding to the challenges of incorporating private assets into investor portfolios in several ways. One way is by introducing the total portfolio approach to a broader range of investors, and another is by developing products and portfolio solutions that combine public and private investments. These include multi-asset funds, model portfolios, and target-date solutions.
Today, we look at why private markets growth is driving greater interest in TPA and how this approach differs from conventional strategic asset allocation. It also considers how public-private products and solutions address some of the challenges investors face, and what investors and their advisors may need to do to apply total portfolio principles in practice.
What Is the Total Portfolio Approach?
At its core, TPA challenges whether an institution’s or household’s financial objectives can be adequately met by establishing rigid allocations to asset segments managed in separate silos. Instead, investments and strategies are evaluated by their expected contribution to overall objectives, rather than primarily by whether they represent the best value within a predetermined asset-class allocation.
Bank of Singapore succinctly states the principle in its Whole Portfolio Approach for Wealth Investors: “TPA starts from a straightforward premise: ultimately, the only portfolio that matters is in its totality.”
This approach requires making comparisons across the entire opportunity set available to an investor. A private equity investment, for example, may be assessed against comparable public equities or against other asset types, such as infrastructure or real estate. In this way, TPA becomes a relative value exercise across many dimensions and is often described as creating a “competition for capital.”
For institutions, TPA requires a comprehensive view of objectives, risk exposures, and liabilities. It also requires a more flexible capital allocation process and more centralized governance. Institutions that adopt TPA may need to revise investment decision-making authority, reporting systems, and compensation structures to implement the approach effectively.
Adopting TPA for family offices and high-net-worth individuals may be even more complicated. Their portfolios often include real estate, private businesses, employee stock, trusts, and estate planning objectives, and may be managed by multiple advisors. Coordinating investment decisions across these holdings and advisors can be both time-consuming and resource-intensive.
Strategic Allocations Remain as Guidelines
The approach does not require eliminating strategic allocations. Institutions may continue to use an allocation framework that reflects their return objective, risk tolerance, market outlook, and regulatory or other restrictions. What is different under TPA, however, is the role these strategic allocations play. Rather than serving as rigid capital allocations that are often implemented by separate investment teams, they serve more as guidelines.
TPA is therefore not a free-for-all. It replaces some of the rigidity of predetermined allocations with a requirement that investments demonstrate how they improve the total portfolio. In practice, institutions may adopt these principles to varying degrees, depending on their organizational structure, culture, and constraints.
Why Private Market Growth Strains Conventional Strategic Asset Allocation
TPA is especially relevant as private assets become a meaningful part of an investor’s portfolio. In addition to the potential overlap in economic exposures between public and private market securities, the illiquidity, uncertain cash flows, and limited transparency of private assets can affect the portfolio as a whole. Illiquidity can constrain an investor’s ability to rebalance, while unpredictable capital calls and distributions can complicate liquidity planning. Infrequent valuations can also make private assets appear less volatile and less correlated with public markets than their underlying economic risks would suggest. The growth of private markets therefore makes TPA increasingly important.
Over the last decade, private markets have expanded not only in size but also in the breadth of strategies available to investors. The opportunity set now includes a wide range of private credit strategies, infrastructure, and later-stage venture capital. Broad categories such as real estate and infrastructure may include both equity and debt, and can range from core income to higher-risk value-add strategies with materially different return drivers.
Why an Alternatives Allocation May Not Diversify as Expected
As individuals have increased their allocations to private assets, many investors and their advisors have adjusted their asset allocation models by adding a separate alternatives bucket. For example, an advisor might recommend moving from a traditional 60% equity and 40% fixed income portfolio to a 50/30/20 allocation, with 20% assigned to alternatives.
Consider, however, what happens if the entire 20% alternatives allocation consists of private equity buyout funds. The portfolio may be labeled 50% equity, 30% fixed income, and 20% alternatives, but economically it may look much closer to a portfolio with 70% equity exposure and 30% fixed income. The allocation labels have changed, but the underlying risk mix may not have changed nearly as much.
As private markets broaden, allocation models need to look through the “alternatives” label and analyze public and private assets together where there is meaningful economic overlap. However, performing this analysis can be difficult for individual investors and advisors with limited resources. Investment managers are responding in part by developing products and portfolio solutions that integrate public and private exposures.
Public-Private Products Enter the Frame
Over the past 18 months, several public-private products have been introduced, including the Wellington/Vanguard/Blackstone WVB All Markets Fund, launched in July. The Fund is an interval fund that incorporates public equities, fixed income, and private assets managed by the three firms, with approximate allocations of 40–60% to public equity, 15–30% to public fixed income, and 25–40% to private assets. In addition to managing the public equity sleeve, Wellington determines the fund’s overall allocations.
Other structures are also bringing public and private markets together. State Street Global Advisors and Apollo Global Management launched a public-private credit ETF in February 2025, while Capital Group and KKR have launched public-private credit and equity funds and announced plans for public-private model portfolios and a target-date solution.
What These Products Can and Cannot Solve
Beyond improving access, these products can address several portfolio management challenges created by private assets. Depending on their structure, they can delegate manager selection, liquidity and cash flow management, and periodic rebalancing to an investment manager or model provider. This can reduce the burden on advisors and investors of coordinating multiple private investments alongside a public market portfolio.
However, because these products are designed for broad groups of investors rather than the unique financial needs and risk tolerances of individual households, they cannot, by themselves, constitute a Total Portfolio Approach. Further, rigid allocation ranges or too few investment options can constrain their effectiveness by limiting managers’ ability to respond to changes in relative value across asset classes, sectors, or markets.
A Path Toward TPA for Individuals
Individuals and their advisors do not need an institutional investment staff to apply the core disciplines of TPA. A workable approach starts with a few manageable steps:
- Start with the whole household. Liquidity needs, taxes, liabilities, legacy objectives, and other constraints determine what the investment portfolio needs to accomplish. Only then should investors determine whether private assets can improve the portfolio.
- Look through asset class labels. Investors using private assets should understand which strategies replicate economic exposures already present in public markets and which introduce meaningfully different return drivers.
- Map total economic exposure. Identify concentrations in growth, inflation, interest rates, leverage, and other important risk factors, regardless of whether those exposures sit in public or private investments.
- Use public-private products as tools, not as a substitute for the TPA framework itself. They can simplify access, allocation, and rebalancing after the investor has determined the exposures the total portfolio should contain.
- TPA is a process, not a one-time allocation. As financial circumstances, markets, and relative valuations change, existing investments and new opportunities should compete again for capital.
Implementation Rests with Investors and Their Advisors
The investment community is increasingly considering the Total Portfolio Approach, as evidenced by CalPERS’ decision to adopt TPA and the growing attention it is receiving in private wealth management, illustrated by the Bank of Singapore report. This is happening, in part, because of the expanded role of private assets in investor portfolios. In response, investors are now being offered public-private products and structures that simplify access to private markets and delegate some allocation and rebalancing decisions across public and private assets to an investment manager.
These public-private solutions cannot, by themselves, meet every household’s specific needs. The application of TPA therefore still needs to occur one level above the products or models investors use. Investors and their advisors must first understand the household’s objectives and constraints, map its underlying economic exposures, and broadly determine how to allocate its capital. Public-private products can then feed into the Total Portfolio Approach. Still, their contribution will depend on the transparency they provide into underlying economic exposures and the flexibility they allow to adjust those exposures as relative value shifts across public and private markets.
Steve was formerly the Chief Investment Officer and Head of Private Markets at Manulife Investment Management. In this role, he was responsible for leading global investment teams across a wide range of asset classes, including private equity and credit, real estate, infrastructure, timber, and agriculture. Steve has served as a director of many public and private companies during his career, including two of Manulife’s U.S. SEC-registered investment advisors.
Important Notice: Private Markets Navigator does not provide investment advice, and the information should not be construed as such. Investing in private asset funds is risky, with potential for total loss and long-term liquidity restrictions. Read our full dislaimer.
