Limits of small functors
  For a small category K enriched over a suitable monoidal category V, the free completion of K under colimits is the presheaf category [K*,V]. If K is large, its free completion under colimits is the V-category PK of small presheaves on K, where a presheaf is small if it is a left Kan extension of some presheaf with small domain. We study the existence of limits and of monoidal closed structures on PK. 
Brian J. Day and Stephen Lack