Where is the maximum expression? The idea that power law returns are an overarching category for venture portfolio performance is a simplification that masks the underlying complexity.
The dominance of power laws is contingent and can be weakened by specific market dynamics, especially in Hong Kong.
For example, major changes in the regulatory policy of the SFC or HKEX, or an intervention by PBOC on the offshore RMB, can shift the cards and make rapid arbitrage and liquidity risk management more critical than simply pursuing extreme returns, altering the intrinsic asymmetry of opportunities.
Decision quality in this context is not just about identifying extreme returns but about operating in these volatile environments with a ceiling in mind.