Review portfolio strategies for a variety of asset classes including fixed income, equity and alternatives. A description of corporate portfolio management and why it is important to your organizations success. Although academia has shown great interest in diversification and mergers and acquisitions, the management of multibusiness portfolios, also known as corporate portfolio management cpm, has. Modern portfolio theory has had a marked impact on how investors perceive risk, return and portfolio management. The main aim of a commercial bank is to seek profit like any other institution. Modern portfolio theory mpt is a theory on how riskaverse investors can construct portfolios to optimize or maximize expected return based on a given level of market risk, emphasizing that risk. The crux of corporate strategy building an advantaged portfolio. Project portfolio management ppm describes how we manage the oftenconfusing mix of interrelated, dependent, and connected projects. Find materials for this course in the pages linked along the left. This paper presents a theoretical foundation for project portfolio management as a discipline. The new dynamics of managing the corporate portfolio mckinsey. Corporate finance is only a few decades old, and people have been running businesses for thousands of years.
The course is intended for 32 academic hours 2 credit points. Academic research on strategy and risk verifies that risk analysis should be a key component of strategic management, and that corporate portfolio management can be an important instrument to. Portfolio management in practice essential capital markets brentani, christine on. Theory and practice we are grateful for comments from don chew, michael hofmann, joanne lammtennant, tom obrien, jerome taillard, and william wilt. Learn how to conduct portfolio performance measurement and attribution. This video lecture introduces the tangency portfolio and the sharpe ratio as a measure of riskreward tradeoff. Unlimited viewing of the articlechapter pdf and any associated supplements and figures. Nocco and stulz, 2006 and have paid more attention to the links between. This course is a component of the portfolio management professional certificate. While there is a natural connection between theory and portfolio practice, it is not. Portfolio theory slides 146 pdf video for part i of portfolio theory covers slides 112.
Chapter 9 focuses on asset allocation, both from a strategic and a tac tical. Additionally, senior management will be able to systematically include risk in investment evaluation, resulting in better management of corporate assets from a riskreturn. Investment analysis and portfolio management 5 the course assumes little prior applied knowledge in the area of finance. In recent years, corporate executives have progressively changed their focus from pure financial risk management to enterprisewide risk management morgan stanley, 2005. Portfolio management in oil and gas building and preserving optionality 1 change is the new constant in an increasingly complex and uncertain environment, oil and gas companies worldwide are facing relentless pressure to improve returns even as they encounter strong headwinds. Learn portfolio and risk management from indian school of business.
Corporate portfolio management cpm is at the centre of corporate strateg y. Ulrich pidun, harald rubner, matthias kruhler, and. This book provides a solution to this dilemma by supplying techniques to assess the value of projects, prioritize projects, and decid. The company last two reported income statements indicate that the company has done very well in the. Read this article to learn about the portfolio management of a commercial bank. Project portfolio management in theory and practice it today. Beginners guide to project portfolio managementcritical.
The doctrine of project portfolio management could be criticized for suffering from deficiencies in its theoretical base and it is for this reason that this paper explores the relevance of established theories, such as modern portfolio theory and systems theory, to project portfolio management. Which processes have companies adopted, and which executives in a company tend to be the main participants. It provides a clear treatment of the scope and limitations of meanvariance portfolio theory and introduces popular modern risk measures. Exams finance theory i sloan school of management mit. Forty years after the introduction of the bcg growth. Towards a theoretical foundation for project portfolio management. The theory and practice of strategy in business organizations s. This course presents an overview of the basic concepts and techniques used to construct financial portfolios. Project portfolio management in theory and practice.
Course objectives investment analysis and portfolio management course objective is to help. This book and exercises evaluate modern portfolio theory markowitz, capm, mm and apt for future study. The portfolio is a collection of investment instruments like shares, mutual funds, bonds, fds and other cash equivalents, etc. It is well known in theory and practice how to manage a single project. A cima certification registered education program concepts, theories, models, and. Twothirds of the participating companies apply cpm regularly. But little is known about the current practices of cpm. Corporate strategy theory and practice ulrich pidun springer. Corporate strategy theory and practice ulrich pidun. Risk management has become a relevant topic in corporate finance theory and in managerial practice. Jofre foreword the present report is the result of an ongoing study on the patterns and trends on both the theory and practice in the field of strategic management.
Theory and practice forty years after the introduction of the bcg growthshare matrix, some. Project portfolio management in theory and practice thirty case studies from around the world jamal moustafaev, mba, pmp click here to order project portfolio management in theory and practice. Its investment policy, in turn, depends on the manner in which it manages its investment portfolio. To be fair, it is true that corporate financial theory has made advances in taking. Pmi thought leadership series implementing the project portfolio. Theory and practice article in journal of applied corporate finance 231. Portfolio management is the art and science of selecting and overseeing a group of investments that meet the longterm financial objectives and risk tolerance of a client, a company, or an. Portfolio theory and risk management with its emphasis on examples, exercises and calculations, this book suits advanced undergraduates as well as postgraduates and practitioners. Analogies that build on financial portfolio theory or on concepts about product and research and development pipeline portfolios which are more akin to it portfolio management than to financial portfolios are not new. Video for part iii of portfolio theory covers slides 33. Implementing the project portfolio project management institute. Portfolio theory video lectures and slides finance theory.
In addition to his work at bcg, ulrich pidun serves as honorary professor for corporate strategy at technical university of berlin, germany. Portfolio management in practice essential capital markets. What is portfolio and portfolio management definition. Portfolio management is the art of selecting the right investment tools in the right proportion to generate optimum returns with a balance of risk from the investment made. Mar 18, 2011 forty years after the introduction of the bcg growth. This invaluable resource presents effective portfolio management practices supported by their underlying theory, providing the tools and instruction required to meet investor objectives and deliver superior performance. This course teaches you the concepts of risk and expected return. But for a corporate entity to create value over time, it must add value above and. The book is structured to follow the journey of systematic corporate strategy. His research interest is in corporate level strategy, portfolio management, growth strategies and corporate planning. The new dynamics of managing the corporate portfolio in a buyout market where suddenly it seems that everything is for sale, companies throughout the world face mounting pressure to actively manage their portfolio of businesses. Cpm should cpm should not be limited to simple matrices or other instruments for managing the corporate portfolio. Over the next 10 weeks you will operate the portfolio as you see fit, however, the initial instructions represent the mandate of the portfolio.
Every ceo in the world, if questioned, will always complain that there are a lot of ideas to implement, but, unfortunately, insufficient resources to accomplish them. The report focuses on three relevant issues regarding. Successful organisations make strategic choices about which activities should be implemented to deliver their decisions at this level can significantly impact the. A vital csuite focus november 2015 6 2015 project management institute, inc. Meskendahl, while extremely important, it is also the tricky part. Theory and practice april 18, 2011 by ulrich pidun, harald rubner, matthias kruhler, robert untiedt, and michael nippa ever since bcgs bruce henderson introduced the growthshare matrix in 1970, the concept of corporate portfolio management cpm has revolutionized how ceos and corporate boards think. Theory and practice ulrich pidun principal in the frankfurt office of the boston consulting group and a global expert in corporate development. Portfolio management definition, objectives, importance. Ppm considers the big picture of all projects grouped togetherpast, present and futureand calculates the optimal prioritization and sequencing of projects to maximize roi. Video for part ii of portfolio theory covers slides 1241. Its capacity to earn profit depends upon its investment policy. From the original purpose of mpt through to asset investment by management, we learn why anybody today with the software and a reasonable financial education can model portfolios.
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