It's kind of the opposite - funds take relatively concentrated positions using a lot of leverage then install new management or hire consultants to make the company more profitable (on paper at least, and usually by cutting costs).

Also, VC returns are distributed according to a power law because most startups won't pan out. Private equity buys companies later in their lifecycle, banking on levering up stable operating cashflow rather than banking on the product becoming the next FAANG unicorn. There's a bit of a continuum between VC -> Growth Equity -> Private Equity.