nondiversified management company(redirected from Nondiversified Management Companies)
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.
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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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.