Case Study: Alpha Centauri achieves improved returns and risk control with FIS APT Factor Modeling

Reaping the Rewards of Modern Risk Profiling

Alpha Centauri, a Hamburg‑based investment boutique that had grown to over €300 million with market‑neutral, single‑factor strategies, faced sharply deteriorating returns during the euro crisis and suspected hidden risk exposures in its strategies. The firm engaged FIS and its Arbitrage Pricing Theory (APT) Factor Modeling solution to build a research and portfolio‑construction infrastructure to identify and address known and unknown risks.

FIS implemented its APT Factor Modeling to uncover unintended factor betas, asymmetric payoffs and alignment problems, and helped Alpha Centauri design and test new European factor indices in collaboration with STOXX. The partnership produced multiple new indices and focused risk solutions, delivering an ex‑ante tracking error of about 3% and average excess return of 2.75% versus the STOXX Europe 600 in the first nine months, putting Alpha Centauri in a stronger position to grow its factor investing business.

Alpha Centauri

Ulf Füllgraf

Managing Director