We study how family size shapes both the investment skill and scalability of affiliated mutual funds. We show that family scale has economically large but opposing effects—it reduces fund skill while improving scalability for a majority of funds. On net, these family effects enhance value creation and allow funds to sustain a positive value-added despite managing large amounts of capital. A normative analysis further reveals that families operate far beyond their value-maximizing size. Despite this excess capacity, family fee revenues remain close to optimal levels, indicating that families capture substantial rents through asset growth rather than value-maximizing capital allocation.

Keywords: Families, Funds, Skill, Scalability, Value Creation.

JEL Codes: C55, C58, G11, G12, G23.