State Street Global Advisors is adding a dash of alpha to its latest elixir for investors. The Boston-based fund firm and institutional money manager announced a number of alliances Tuesday through which it intends to bolster its line-up of alternatives products. SSgA now managers some $4 billion of assets to these mandates.

Alpha has become one of the money management industry's catch phrases over the past year as managers look for ways to differentiate themselves from competitors and index strategies. Earlier this year, for example, MassMutual refocused its David L. Babson unit as an "alpha" manager for institutional and high networth clients, sending that firm's funds to its Oppenheimer Funds unit. At Ibbotson's annual conference James Choi took on the topic in a talk which raised the possibility that alpha is in finite supply.

The potentially limited supply of alpha opportunities may play into the hands of deep-pocketed firms such as SSgA.

To boost its capabilities, SSgA executives have licensed dynamic allocation software developed by AlphaSimplex Group, a quantitative investment management company based across from the Charles River in Cambridge. The software is the brainchild of Dr. Andrew W. Lo, the director of the MIT Laboratory of Financial Engineering, and the Harris & Harris Group Professor at the MIT Sloan School of Management.

Chris Woods, who leads SSgA alternatives team and reports to Jane Tisdale, senior managing director of Absolute Return Strategies, said that the licensing of the AlphaSimplex technology will allow "greater flexibility" for SSgA to build standard and customized alpha investment solutions for clients. "The combination of our risk management expertise and AlphaSimplex's tools for dynamic asset allocation distinguishes us in this competitive industry," said Woods.

Woods has also made a number of hires for his team, including the addition of Jonathan Chanis (from Caxton Associates), Henri Fouda (from Mellon Capital Management), and Todor Georgiev (KBC Alternative Asset Management). The team also draws on the resources of SSgA's Advanced Research Center, a group of more than 25 analysts with advanced degrees in mathematics and applied finance disciplines.  

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