Economies of Scale and Scope in Alternative Asset Management

59 Pages Posted: 25 Jul 2022 Last revised: 26 Sep 2023

See all articles by Wayne Lim

Wayne Lim

Harvard University; University of Oxford

Date Written: July 19, 2022


I access proprietary data on 2,901 private equity firms to address two questions: what determines fund openings (scoping), and do fund openings adversely affect private equity firms’ performance? First, I find that firms that are larger (prior scale) or manage more fund types (prior scope) are inclined to open new funds and do so more quickly. Second, I find no evidence that performance declines when firms open new funds. In some instances, performance even improves. These results suggest that when firms grow in scope, the benefits of institutional learning outweigh the organizational costs, supporting the hypothesis of value creation over empire building.

Keywords: private markets, private capital, alternative investments, private equity, returns, performance, industrial organizations, scale, scope

JEL Classification: G1, G2, G3, L1, L2

Suggested Citation

Lim, Wayne, Economies of Scale and Scope in Alternative Asset Management (July 19, 2022). Available at SSRN: or

Wayne Lim (Contact Author)

Harvard University ( email )

University of Oxford ( email )

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics