Right up until last fall, practically every alternative investment conference this side of the date line had at least one panel of experts discussing and debating the elusive search for alpha, and how to capture and augment a traditional or even non-traditional portfolio by finding managers that were truly capable of generating non-beta returns.

And then the black swan-poop hit the fan.

Nowadays talk of alpha generation and alpha-beta separation still permeates, though the search for it – and expectations of finding it – has greatly diminished. It’s more about earning a return – period – than earning a return above and beyond what the rest of the market is looking for.

Along these new lines has emerged a very quiet yet growing subset of individuals who believe that alpha still exists, but that getting it isn’t, dare they say, legal.

From market-timing and late-trading to illiquid valuation techniques and 20:1 levered bets to discrepancies in share pricings between markets and indices to the growing popularity of super low-latency flash trading, these pundits, who wish to remain both nameless and faceless for fear of being drawn and quartered by their bretheren, argue that alpha can’t be obtained legally. More…