The first chapter of the dissertation explores whether hedge funds experience decreasing returns to scale. The study found no evidence of decreasing returns at the hedge fund level, but hedge fund returns do decrease with industry size due to competition. The second chapter focuses on style drift in mutual fund management, showing that small-cap funds often invest in mid- and large-cap stocks over time. These funds may expose investors to unexpected risks, but they did outperform their peers by 3% annually in a recent period.