Excess return over the CAPM benchmark prediction; the regression intercept in R_i - r_f = α_i + β_i(R_m - r_f) + varepsilon_i. Statistically significant positive α is the empirical signature of manager skill, but the Information Ratio IR = α / σ(varepsilon) (alpha per unit of idiosyncratic risk) is the cleaner skill metric because it penalises noisy alpha. Most reported alpha disappears after fees and after controlling for size, value, momentum, and quality factors (Fama-French / Carhart).