How much of your firm sits in one sector

The question

How much of the firm's deployed capital sits in its largest sector, and is that consistent with the industry scope the firm says it operates under.

The measurement is at the firm level and uses deployed capital rather than company count, because ten small positions and one very large one are different exposures that a headcount would report identically.

Why a fund-level view misses it

Sector concentration is the clearest example of something that is invisible from inside any one fund. Each fund can hold a defensible sector spread while the firm holds almost all of its capital in one place, because the same conviction that shaped Fund I usually shapes Fund II.

That is not a mistake. A firm gets better at the sector it keeps investing in, and returning to it is often the right call. What makes it worth measuring is that the decision was made once, implicitly, and then repeated. Nobody sat down in year six and decided the firm should hold that much of one sector; it accumulated.

It reads against your own declaration

There is no universal correct sector concentration. The engine reads the top sector's share against the industry scope the firm has declared, so the same distribution can be aligned for one firm and flagged for another.

Resolving that scope across a multi-fund firm takes a step of its own, because funds can declare different scopes. The engine weights each fund's declared scope by the capital that fund actually deployed and takes the one holding a clear majority of the firm's capital. Where no scope holds a clear majority, the firm is treated as thematic and marked as ambiguous rather than being assigned a scope it never claimed.

Two consequences worth knowing. Funds with no scope recorded still count in the denominator, so a firm with several unscoped funds can read as ambiguous even when its scoped funds agree. And a firm whose scope genuinely shifted between funds will read as ambiguous, which is an accurate description of a firm in transition rather than a failure.

The flag runs in both directions

The expected reading is over-concentration: more capital in one sector than the declared scope implies. A firm calling itself generalist with most of its capital in one place has a description problem, an execution problem, or both.

The less expected reading is the reverse. A firm that declared deep scope, meaning a single sector known thoroughly, and whose largest sector does not actually hold a concentrated share, is flagged for not delivering the depth it declared. It is a distinct flag rather than the standard one, and it replaces the standard flag rather than stacking on top of it.

This is the part worth sitting with. Deep scope is a claim about advantage: this firm knows one thing better than generalists do, and that is why it should be backed. A deep-scope firm whose capital is scattered has not diversified its way to safety. It has spent the advantage it raised on and kept the positioning.

How the reading changes by lifecycle

The engine reads a Conviction-stage firm on different terms from a Cadence or Continuity firm, because concentration of conviction is structurally appropriate early. An emerging firm holding a large share of its capital in one sector is doing what an emerging firm is supposed to do; a franchise firm doing the same has a different conversation to have with its LPs.

Lifecycle is resolved across the firm rather than taken from one fund, preferring the most recent active fund. A firm whose funds are all fully exited is recognized as winding down, which changes how its distribution should be read: a wind-down book concentrates naturally as the losers are written off and the survivors are marked up.

What this does not read

It reads capital deployed, not marks. A sector that has been marked up sharply does not become a larger share here; the exposure is measured by what the firm put in, which is the amount actually at risk.

And it depends entirely on the sector labels in the firm's own records. Inconsistent naming splits one real exposure across several apparent sectors and makes a concentrated firm look distributed. The platform watches for the signature of that problem and prompts, but it will not guess at what was meant.