# kaal:claim:2715083-010

**Claim.** Operating a mutual fund is materially more capital intensive than operating a hedge fund: the mutual fund adviser's required investment in trading and operational technology and in specialized staffing substantially exceeds what a hedge fund manager must spend.

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

**Holds when.**

- comparison of registered mutual fund advisers with unregistered hedge fund managers

**Source quote.**

> the size of the investment in trading and operational technology and in experienced portfolio management, trading, reporting, operational, risk management, and other staffing incurred by a mutual fund adviser is materially larger than what a hedge fund manager must expend to operate its business.

**From.** Kaal, *Confluence of Mutual and Private Funds* (2016), III. Persistent Differences and Nominal Confluence, page 8

**Cite as.** Kaal, Confluence of Mutual and Private Funds (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2715083

**Verify.** sha256 of source PDF `b5c92186260d4a8499a14f81ee24ace093b24e7740af3effcd1c526fa4fa221e` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202016%20-%20Confluence%20of%20Mutual%20and%20Private%20Funds.pdf

**Topics.** compliance, private-funds

**Keywords.** compliance-cost, operational-infrastructure, mutual-funds, hedge-funds

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