[w1ntermute]

Sure, diversification is fundamental to modern portfolio theory, and the long run returns for a diversified fund tend to be positive. And the stock pickers who outperform aren't necessarily anything more than statistical outliers (http://longbets.org/362/). Just because the eventual outcomes diverge doesn't mean that there must have been a discernable signal in the noise indicating that.

Given how many top venture funds simply invest partners' and partners' friends' capital at this point, most institutional LPs would be best off avoiding venture. The same goes for quant funds - Renaissance Technologies' Medallion Fund has only contained prop money for years.