TheMega-ManagerParadox:HowConcentrationRiskinAlternativeAssetManagementImpactsInstitutionalPortfolios
This paper examines how mega-manager dominance can reduce the diversification benefits institutions seek from private markets. As funds grow larger, they are pushed toward similar assets, strategies, and deal structures, which can increase correlation across portfolios. Scale can also limit flexibility, create pressure to deploy capital during less favorable market conditions, and compress returns as competition for large transactions intensifies.
At the same time, this concentration leaves meaningful parts of the market undercapitalized. Smaller and specialized managers operating in lower middle-market segments, niche sectors, and overlooked geographies often face less competition and rely more on operational expertise than financial engineering. While these managers require more diligence and oversight, they can offer differentiated exposures and stronger alignment between managers and investors.
Omnigence’s approach reflects this view. The firm focuses on under-financialized segments of private markets where scale is less of an advantage and operational insight matters more. By operating in areas such as farmland, lower middle-market private equity, and emerging manager secondaries, Omnigence seeks to provide investors with differentiated exposure and portfolio diversification that is difficult to achieve through concentrated allocations to large platforms alone.