Below a certain scale, with the right client base, the question has a clear answer. Above it, the conversation becomes worth having.
With a client base not targeting institutional Luxembourg structures, the AMC is almost always the better answer.
With a specifically institutional distribution target, the fund conversation becomes worth having.
Many managers launch an AMC as a proof-of-concept — to build a track record before migrating to a fund. In practice, most choose to stay: not because the threshold is hard to reach, but because they become genuinely comfortable with the AMC.