Once defined by focus and specialisation, equities, real estate, private credit, or venture capital, many firms are now broadening their scope. Global names that built their reputation in one lane are now expanding into others. In private markets, for instance, venture specialists like Lightspeed have stretched from early-stage investing into growth and credit. This is part of a broader pattern: managers are no longer content to be specialists, but instead are building diversified, multi-asset platforms. While often framed as strategic diversification, for many it’s also a response to the realities of growth and scale.
Why Single-Asset Managers Outperform
Investing is a craft refined through repetition. By focusing on a single asset class, they refine their judgement, build sharper pattern recognition, and develop the networks that matter most in their space. Preqin data shows that niche managers often outperform diversified mega-funds on a net multiple basis1. The reason is intuitive - investment skills rarely transfer seamlessly across domains. The toolkit needed to back a growth-stage healthcare company differs fundamentally from the expertise required to structure a real estate debt vehicle or manage an infrastructure asset. Even within the same asset class, the skillset for backing a seed-stage software business is not the same as leading a Series A round. For this reason, specialists often outpace multi-asset peers when competing head-to-head in the same market.
The business and performance paradox
Funds management is not just an investment strategy—it is a business. Many first-time fund managers overlook this distinction. An unspoken truth of the industry is the inherent tension between delivering for investors and growing the firm itself.
The growth metric that dominates our industry is funds under management (FUM). Larger FUM means higher revenue. Yet successful firms often reach a point where their original strategy becomes constrained: too much capital to deploy effectively without compromising performance. To keep growing, managers either expand into new stages or enter entirely new asset classes. The alternative—staying put—risks bloated funds and diluted returns.
But moving into unfamiliar territory is never trivial. Each asset class demands its own skills, networks, and judgement. Some managers adapt and build genuine capability; others risk diluting their edge in the chase for scale.
Benefits of multi-asset managers
Despite these challenges, the multi-asset model offers undeniable advantages. For investors, it can provide one-stop access to diversification, simplify administration, and strengthen alignment with a single trusted partner. For managers, it delivers economies of scale in operations and brand, while also providing resilience across market cycles. When venture capital slows, private credit or infrastructure may still be in demand.
Balancing the trade off
The industry is being reshaped by these competing forces. Specialists will continue to deliver outperformance within their chosen domains, while multi-asset managers will attract those who value breadth, convenience, and durability. Both models have merit. The key question is how to balance the trade-off between scale and performance.
At Aura, we began as a multi-asset firm because we believe investors should have access to different exposures—but each managed as a distinct strategy, led by teams with deep domain expertise. In our view, the future will favour those who can scale with discipline, respecting the truth that every asset class demands its own specialised skill set.
1. Forbes, Beyond Big-Name Fund Managers: It’s Time For Smarter Diversification
