From Funds to Families: Organizational Scale in Value Creation

Laurent Barras, Phorn-Arpha Phutphithak and Olivier Scaillet
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Laurent Barras: Universite du Luxembourg - Department of Finance
Phorn-Arpha Phutphithak: Swiss Finance Institute - University of Geneva

No 26-27, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: We study how family size shapes both the investment skill and scalability of affiliated mutual funds. We show that family scale has economically large but opposing effects-it reduces fund skill while improving scalability for a majority of funds. On net, these family effects enhance value creation and allow funds to sustain a positive value-added despite managing large amounts of capital. A normative analysis further reveals that families operate far beyond their value-maximizing size. Despite this excess capacity, family fee revenues remain close to optimal levels, indicating that families capture substantial rents through asset growth rather than value-maximizing capital allocation.

Keywords: Families; Funds; Skill; Scalability; Value Creation (search for similar items in EconPapers)
Pages: 51 pages
Date: 2026-03
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2627

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