No, it's the exact opposite. The limit of how much money you can put through a given strategy mean there is an antieconomy of scale that encourages lots of small firms.
this is the complete opposite of true. I work in the industry, too busy to write up a response. But basically, the top five hedge funds are making most of the returns and are attracting most of the capital. the industry is consolidating
It's certainly plausible that the few best funds are outliers in terms of return. And I'm sure they attract a lot of capital in the sense that a lot of people want to invest in them, but that doesn't mean they allow it. As far as I can tell, the top 5 hedge funds by AUM have around 10% of the whole sector's capital. In comparison, the top 5 tech companies in the S&P500 have market caps summing to around 10% of the whole index (not just the tech sector).
Dollar weighted? Real question. Take Bridgewater and a 5% return and that's billions in profit which likely represents a meaningful portion of the total profits made. Is that what you mean?
