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They do. But if you offer the service to other people, you get a lot more money to play with (meaning you can do more or different things than you could with less) and get to charge performance fees etc. in addition to your own capital gains.

Really, you could say it about absolutely any job, it's just a bit more direct with managing money. 'If you were any good at writing software you would just sell your own SaaS', etc.

That's the common claim, but if you actually look at the successful funds that beat market year after year, their public fund is always the low yield, experimental strategies while the internal funds demolish the market. The reality is that most lucrative strategies have a yield cap and people who find them quickly surpass the cap so they just keep the strategies to themselves.

That doesn't really invalidate my point though: the extra capital gives the option, and the fees.

They probably do. They just make it their day job by selling their services to others as well.

The catch 22 for this assumption is that they want to be richer than their own money would allow