The murky world of hedge fund suggests that there is some truth in it. From Bloomberg's interview with Richard Maraviglia, a small hedge fund manager who outperformed better-known rivals managing billion:
“If you want strong outperformance, a smaller fund has a better chance of producing that,” said Maraviglia, who plans to close his hedge fund to new money after receiving commitments from investors for the $250 million. “How big an allocation can a big fund make to a great trading idea for it to make much of a difference in their total portfolio?”This points to a dilemma between the size and efficient captital allocation. Would the same reasoning be valid at the whole financial sector level ?
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