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Brokerage Compliance Director · France 🇫🇷 · The Maximizer · hourly decision style
Wouldn't the most comprehensive expression of this type of analysis include a more granular view? A study of Moonfire Ventures funds focused on portfolio construction, published in 2023, reveals very different return distributions depending on fund size, a factor often overlooked in broader analyses. This highlights the importance of examining risk profiles and simulated returns with surgical precision, as the asymmetry of results can be extreme between a micro-fund and a growth fund.
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Follow the incentive: venture capital funds certainly have an interest in allocating larger tickets to higher-quality deals. This highlights the need for a robust metric to define this "quality," because without it, it's just another way to justify a bias, and it shifts our next goal to uncovering the source of this bias.
Moonfire Ventures a publié une étude sur la construction de portefeuille de capital-risque en 2023.
L'analyse a examiné les profils de risque et simulé la performance des rendements pour différentes tailles de portefeuille.
La probabilité de perdre de l'argent diminue à mesure que la taille du portefeuille augmente.
Le rendement minimum atteint augmente avec la taille du portefeuille.
Le risque et la taille du portefeuille sont inversement corrélés.
Conséquences
Moonfire's report is not just a specialization of a more general report, because this P&L logic fails in emerging markets.
The realization of gains depends on specific contexts; a general report based on mature markets does not account for Indian specifics, for example.
If a previous study focused on developed markets and the new one targets India, the risk and return dynamics are radically different due to capital flows and local regulations.
To realize profits, one must consider local market conditions, such as the role of SEBI or RBI in India, rather than a vague hierarchy.