Riva D. Atlas in the New York Times on institutional investors increasingly frenetic search for alpha. As a result institutions have embraced hedge funds as a source of alpha.

“Institutions are getting really aggressive about looking for alpha,” said Jane Buchan, chief executive of Pacific Alternative Asset Management, which manages funds of hedge funds. “They are investing anywhere they can find it.”

The tricky thing about alpha is that it is often comes packaged with beta that investors do not necessarily need or want. The challenge for investment providers alike is to disentangle the two and provide investors with “portable alpha.â€? This allows investors to craft a customized portfolio that makes bets on alpha without taking on extraneous beta risks.

We like to say that generating alpha is “neither easy nor cheapâ€?. Apparently some others agree with us:

Managers of portable alpha portfolios agree that they are making the best of a poor market environment.

“This is a bet that pays off over long periods of time,” Ms. Buchan of Pacific Alternative Asset Management said. “But that doesn’t mean there aren’t times when the clock runs against you. There is no perfect solution.”

In today’s environment you should not be surprised that there are a number of articles on hedge funds. Bloomberg.com takes a snapshot of the hedge fund industry, and finds:

Now, the days of easy money are over. After more than doubling in size since 2000, the hedge fund industry entered the final months of 2005 with almost no hope of reliving its past glories, at least for now.

Apparently wealthy investors have taken note as well. Douwe Miedema at Reuters reports that wealthy individuals’ interest in hedge funds is waning as institutions become the predominant suppliers of capital to hedge funds. One implication is that institutions may force hedge fund managers to become more flexible in regards to fees.

Investors are seeking alpha in venture capital as well. Rebecca Buckman in the Wall Street Journal reports that median valuations for venture capital backed startups hit a level not seen since 2001. The success of Google (GOOG) is undoubtedly playing some role in this rise in valuations as well.

From the just when you thought you had seen everything file. InstitutionalInvestor.com reports on the formation of REITs focused on wineries and vineyards. Now that’s “potable alpha.”