Fund Size

“A fat wallet is the enemy of superior investment results.” Warren Buffett

“Huge assets drag down returns.” Allan Mecham

“It’s very hard to manage a lot of money.” Charlie Munger

“In the investment world, bigger is not better.” Christopher Bloomstran

"It is ever more challenging to perform well with a larger fund." Peter Cundill

"It's a lot easier to beat the market if you're running fifteen million than a few billion." Jim Chanos

"We have not believed we could get the same satisfactory results on very large capital as we can on a more moderate amount of capital. Because if you deal with special situations and undervalued securities, the markets in those for the most part are not very large. It is not possible to acquire an unlimited amount without affecting market price, and if we had 10 times as much capital it would be very difficult for us to invest it the same way as our present capital." Benjamin Graham 1955

“Size, at a certain point, gets to be an anchor, which drags you down. We always knew that it would. You get $10 billion in marketable securities. Show me unbelievable compound rates when people get $10 billion.” Charlie Munger

"Good results will bring a manager more money to manage. If inflows are allowed to go unchecked, eventually more money will bring bad performance. Increased assets under management can shorten the list of potential investments large enough to make an impact, erode a manager's ability to be selective and agile; and encourage "style drift", under which a manager strays into strategies beyond his core competence in an effort to put money to work." Howard Marks

“The increased size of assets under management definitely reduces our flexibility and therefore our future returns. No good deed goes unpunished.” Ed Wachenheim

“Large amounts of money, they develop their own anchors. It gets harder and harder. I’ve just seen genius after genius with a great record and pretty soon they got 30 billion and two floors of young men and away goes the good record. That’s just the way it works.” Charlie Munger

“One of the historic truisms of the hedge fund world is its overriding diseconomy of scale in the management of money. The ability to achieve superior performance often begins to decline as one manages more money beyond the intellectual breadth of a manager.” Michael Steinhardt

“Being too large in an activity enables the rest of the market to pick you off or ‘gun’ for you’.” Paul Singer

"The huge sums of capital we currently manage eliminate any chance of exceptional performance." Warren Buffett 2009

"Once you get to a certain size, if you mess up they are going to roast you alive." Reade Griffin

“The fact is that sales (‘shout out and pound in’) and size are the two main detractors of long-term performance, after inability.” Nick Sleep

"Every stock market system with an edge is necessarily limited in the amount of money it can use and still produce extra returns." Ed Thorp

“What may be the optimum size under some market conditions and business circumstances can be substantially more or less optimum under other circumstances.” Warren Buffett, Partnership Letter

“In general, the more capital you manage, the worse the returns.” Mohnish Pabrai

“I know more about business and investing today, but my returns have continued to decline since the 50’s.  Money gets to be an anchor on performance.” Warren Buffett

“I must assess, when evaluating a strategy as well as the absolute size of our funds, whether we can move properly in and out of positions.. If you are large, it is important to know how big the exit doors are. Large size makes it harder to move in and out of positions, and can increase the realistically calculated costs of trading (including market impact). It is interesting in this regard that some of the world’s greatest traders (like Bruce Kovner, Paul Tudor Jones and Louis Bacon) decided to return significant portions of their investors' capital after 1994, in order to radically downsize.” Paul Singer

"If anybody that manages large sums of money that promises or implies that they can achieve really outstanding returns, you know, I’d stay away from them. The numbers just get too big.' Warren Buffett

"You want to be big enough that you can see everything and small enough that you don't kill yourself with size." David Tepper

"Anyone who says that size does not hurt investment performance is selling. The highest rates of return I've ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It's a huge structural advantage not to have a lot of money." Warren Buffett

"Having too much money to manage can hurt performance, since the cost of getting in and out of positions can be high because being too big can push the markets .. We were always careful to stay safely short of being too big, lest we kill the goose that lays the golden eggs." Ray Dalio

"Appaloosa is more art. It is hard to create art. It can't be that big and create art." David Tepper

"I think, working with a very small sum, that there is an opportunity to earn very high returns. But that advantage disappears very rapidly as the money compounds. Because I, you know, from a million to 10 million, I would say it would fall off dramatically, in terms of the expectable rate." Warren Buffett

“Of course when you get billions and billions of dollars, the record in terms of percentage terms goes down. I’m not concerned by it, that’s what I [expected] from the very beginning and I knew it would happen eventually, but there’s no way you keep up — it’s hard to buy and sell billions and billions of dollars in securities and have this wonderful record. And if you care about taxes and so on, it gets even harder. And of course the great records converge down as the assets managed goes up and up.” Charlie Munger

“The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.” Warren Buffett

“Beyond a certain level of AUM, size becomes an impediment to skill-based returns as it raises trading costs in a non-linear fashion and reduces the flexibility of trading and risk management.” Paul Marshall

"All large aggregations of capital eventually find it hell on earth to grow and thus find a lower rate of return.” Charlie Munger