Is it possible to increase the Output voltage of a Altivar variable speed drive to compensate the voltage drop?

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Yes, in a small range (10-20V max) it is possible by overmodulation. Overmodulation means that the original sinus shape of the output voltage is a bit increased (except the max value that can't be increased), and also a little bit deformed. The result is that the first harmonic of such a shape is increased (intended). Despite the occurrence of the 3rd harmonic in output voltage, this harmonic is automatically attenuated in 3-phase motor winding.
Set OVMA=full