A category error; power law returns are observations, not direct drivers of performance for all actors.
The true taxonomy must distinguish observations from levers of action, especially in a regulated environment.
For UK pension funds, the ability to exploit asymmetric distributions is intrinsically limited by liquidity constraints and prudent mandates of the PRA or FCA.
For example, after the LDI episode, managing liquidity risk takes priority over the sole pursuit of asymmetric returns, fundamentally changing the applicability of the power law.
The UK regulatory framework shifts the focus from simple decision quality to managing systemic risk and liability resilience.