# kaal:claim:1428387-005

**Claim.** When hedge funds adopt private equity strategies by adding private companies to their portfolios, they exacerbate valuation problems, and the convergence of the two asset classes makes it more difficult to accurately assess the value of each.

**Type.** mechanism  **Support.** argued

**Holds when.**

- where hedge funds hold private, non-traded portfolio companies

**Source quote.**

> If hedge funds engage in private equity strategies, i.e. adding private companies to their portfolio, they may exacerbate the valuation issues. The convergence of hedge funds and private-equity funds makes it more difficult to accurately assess the value of each asset class.

**From.** Kaal, *Hedge Fund Valuation Retailization, Regulation, and Investor Suitability* (2009), II.A Convergence of Hedge Funds and Private Equity Funds, page 5

**Cite as.** Kaal, Hedge Fund Valuation Retailization, Regulation, and Investor Suitability (2009). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1428387

**Verify.** sha256 of source PDF `6aa3a280dc6750723be2389f3af2aabf3a16c4ce20e49fcdaddd7f2ea95a67aa` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202009%20-%20Hedge%20Fund%20Valuation%20Retailization%2C%20Regulation%2C%20and%20Investor%20Suitability.pdf

**Topics.** private-funds, economics

**Keywords.** convergence, private-equity, hedge-fund-valuation, asset-classes

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