Article

Enhanced Portfolio Management

Making capital allocation decisions in uncertain times

January 2015

Where to get best bang for your buck? Allocating finite capital resources across a portfolio of business units, projects or investment opportunities is one of the most challenging tasks facing business leaders. To meet this challenge, businesses can generate and protect value through enhanced, risk-return techniques – improving the quality of portfolio capital allocation decisions.

In today’s ‘new normal’ operating environment of heightened volatility and uncertainty, any incremental advantage to improve capital allocation decisions is like gold-dust.
 
Enhanced portfolio management approaches (based on risk-return techniques) can provide the additive bolt-on to the existing decision-making process to help answer the toughest questions in the capital allocation process:

  • Where should we prioritise capital spend in order to deliver maximum return for acceptable risk?
  • Where should we allocate capital within my business in order to support the company’s strategic objectives?
  • How do we develop a balanced portfolio that not only maximises return, but also operates within my risk appetite boundaries?
  • How do we ensure that capital allocation decisions are supported by the best possible analytics and insight on both risk and return?
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