Where is the maximum expression of power law returns if regulatory context and liquidity constraints limit access to high-potential opportunities?
It is not a universal engine, but a conditional factor for our Family Office strategies in Hong Kong.
Even if the power law distributions are suggested by theory, restrictions from the SFC and HKEX requirements can prevent capturing extreme returns.
For example, strict cross-border investment regulations can block access to promising global startups, thus reducing the ability to realize the full potential of these returns.