# kaal:claim:1428387-025

**Claim.** Qualified investors have strong incentives to accept valuation problems rather than contest them, because contesting would jeopardize their relationships with management and other industry participants and damage their own reputations.

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

**Holds when.**

- qualified investors with industry relationships and reputational stakes

**Source quote.**

> Even though their preference may be to obtain accurate valuation when needed, they have strong incentives to accept valuation problems in order to maintain the relationships with management and other industry participants and protect their reputations. Managers are also dependent on their

**From.** Kaal, *Hedge Fund Valuation Retailization, Regulation, and Investor Suitability* (2009), V.B Informal Rules Protect Primarily Qualified Investors, page 45

**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.** reputation

**Keywords.** qualified-investors, informal-rules, reputation, relational-contracting

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