It’s a common belief in the financial sector that larger active managers underperform smaller managers. When AUM growth is linked to style drift that forces managers out of their area of expertise, it could translate into lower returns. One of the style drifts we commonly see among our public managers is a shift in the average Market Cap as AUM increases. It correlates to broad swaths of market theory that says inefficiencies (alpha opportunities) are riper in smaller capitalization companies because they are less covered and thus less efficient. One could argue, then, that as managers are forced to ramp...