nondiversified management company

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Nondiversified Management Company

A private company often a venture capital firm that does not wish to accept the restrictions on investment that come from diversification. Nondiversified management companies invest in whatever companies or industries they like; they do not concern themselves with the percentage of ownership they have in a single company. A nondiversified management company carries relatively high risk, but has the possibility of a high return if it invests in the correct growth industries. Because of the risk, however, most mutual funds and similar investment vehicles are not run by nondiversified management companies.

nondiversified management company

An investment company that does not agree to be subject to the investment limitations required of a diversified management company. Many venture capital funds, not wishing to be subject to diversification requirements, are classed as nondiversified management companies. Compare diversified management company.