> Hell, their own former employees could theoretically compete against them That happens, with mixed levels of success. But these firms are more than just IP.

> Hell, their own former employees could theoretically compete against them That happens, with mixed levels of success. But these firms are more than just IP. Their moat is: - Lower fees, negotiated based on their volume and relationships. Crucial given margins of 0.02%. - A well-oiled machine that makes the machine. This includes culture, branding into recruitment pipeline, and so on. - IP has a short half-life. The machine that makes the machine is more important. - Scale advantages -- code sharing between teams and asset classes, which is hard to replicate in a small group. - You need to have perfect execution on every vertical to have a good shot. Devs, researchers, operators, relationships. It's also common for that IP to not all be known by a single person. Division of labor can be used to protect IP.