Looking at asset size in reading 18 as a constraint in asset allocation.
I see have too large or too small of portfolio may be an issue.
What does the statement mean, “Asset owners may have portfolios that are too large, their desired minimum investment may exhaust the capacity of external investment managers in certain asset class and strategies”
THanks
Haven’t read it yet but my interpretation is that you have too much money that you can’t invest it in certain ways/in certain situations. An example would be say you have $50 million that needs to be invested say in an external investment manager that specializes in capturing arbitrage but they’re only capable of filling $30 million worth of purchases so you simply have too much that you can’t fully invest. Perhaps the market for the investment you seek isn’t deep enough to fulfill your desired minimum investment.
Try walking into your local grocer on any given day and buying 10,000 apples. Chances are you wont be able to walk out with 10,000 apples. Then, you may walk in the same day and try buying 1 orange, but they only sell them in 6 packs.
Apple example is having to much, orange example is too little.
Thanks everybody. That’s much more clear now.