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Of course they do - it's the same as bookmakers or other gambling syndicates, it only makes sense to operate at a certain scale otherwise the rounding errors and stochasticity will kill you.

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Depends on the HF. They're talking largely about multi-strat or macro firms here. If you're a HF that fills a niche, then size actually works against you as the pool of opportunities available reduces as you get bigger.

For a somewhat hyperbolic example, check out RenTech's Medallion Fund. https://en.wikipedia.org/wiki/Renaissance_Technologies

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