Samra argues that as AUM grows, finding undervalued securities becomes exponentially harder. To maintain high returns, he focuses capital only on his absolute best ideas, avoiding the dilution of a "30th best idea." This concentration is a direct response to the constraints of scale and the difficulty of finding true value.

Privat Capital holds a concentrated portfolio of 16-17 stocks. This strategy forces deep conviction in each position and ensures that winners have a meaningful impact on fund performance. Over-diversification can dilute both research focus and the potential returns from a fund's best ideas.

The firm found that positions growing beyond 8% of the portfolio did not add enough value to justify the increased concentration risk. This disciplined approach prevents overconfidence in single ideas from jeopardizing overall fund performance.

Micah Rosenbloom of Founder Collective argues that keeping fund sizes small is a strategic choice. It aligns the firm with founders by making smaller, life-changing exits viable, maintaining founder optionality, and focusing on multiples rather than management fees from a large AUM.

Alexander Roepers intentionally limits his firm's assets under management (AUM) by closing funds to new investors. He recognizes that, as demonstrated by Berkshire Hathaway, scale is an enemy of high-rate compounding. Staying smaller allows his firm to remain nimble and continue effectively executing its concentrated mid-cap strategy, prioritizing performance over fee growth.

When asked why his target companies are bad at storytelling, Roepers offers a key insight: it's a result of his screening process. Companies in his "boring" industrial sectors that are excellent at messaging and investor relations are already trading at high multiples and thus fall outside his investment universe.

Glenn Solomon argues against the trend of asset aggregation, stating that fund size must be determined by the firm's investment strategy. A strategy of making concentrated, early-stage bets naturally dictates a smaller fund size, while letting AUM demand dictate size corrupts the model.

Solo GP Zal Bilimoria intentionally keeps his fund size small and consistent at $50 million. This disciplined strategy is designed so that achieving a 5% stake in a billion-dollar company at exit would generate a $50 million return, covering the entire fund and ensuring strong performance from a single breakout investment.

While competitors chase mega-funds, the firm deliberately keeps its closed-end funds mid-sized. This strategy allows for greater selectivity, faces less competition from both mega-funds and local players, and results in better pricing. Being part of a large bank insulates them from AUM growth pressure.