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.

The overlap may be deliberate, or it may have accumulated through separate fund decisions. Either way, the firm-level view makes it visible. Review the combined position alongside the mandate rather than assuming each fund tells the whole story.

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. If a firm declares a broad scope but holds most deployed capital in one sector, review the mandate, investment history and reason for that position.

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.

A deep-scope flag asks whether the current distribution matches the specialization the firm declared. It does not establish that the investment strategy has failed or that diversification made the portfolio safer.

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. The model allows different concentration ranges by stage. Those ranges are diagnostic assumptions, not instructions that every young firm should concentrate.

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 winding-down book deserves context about its remaining positions. This deployed-capital measure does not increase a share merely because a valuation is 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 distinct from current value, unrecovered cost or a complete measure of economic 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.