Many allocators wear the size of their manager roster as a badge of diversification. In truth, a portfolio of a hundred fund relationships is rarely more diversified than one of thirty, and it is far harder to monitor, benchmark, and negotiate.
Beyond a point, adding managers adds cost and complexity without adding much genuine diversification. The correlations between large private-market funds of the same strategy and vintage are higher than the roster count suggests, and the marginal manager often just dilutes the allocator's attention.
Depth beats breadth
A concentrated roster of deep relationships gives an allocator leverage: better fee terms, more co-investment, earlier access to the next fund, and a clearer view of how each manager actually operates. Those advantages compound in a way that a long tail of shallow relationships never can.
The allocators who do this well are ruthless about pruning. They exit managers whose edge has faded, resist the pull of every hot new fund, and concentrate capital where their conviction and their information are highest.
Diversification is a real and important discipline. But it is achieved through genuine differences in strategy, geography, and risk, not through the sheer number of names on a page. Fewer, deeper relationships are usually the stronger book.