By tightening the accredited investor net worth standard, the Dodd-Frank Act pushes investors who lose eligibility for hedge fund investments toward hybrid and retail alternative funds, even if the number of affected investors is small.
Source quote, verbatim
While the number of such investors may be negligible, investors who no longer qualify for retail alternative fund investments under Dodd-Frank qualified investor standards are likely to seek out hybrid funds.
Kaal, Confluence of Mutual and Private Funds (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2715083
Holds when
individuals near the accredited investor net worth threshold after Dodd-Frank section 413
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mechanismsupport: arguedinstitutional-design
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restated_bykaal:claim:2811729-021 Among the factors driving unconstrained mutual fund growth, the Dodd-Frank Act decreased the number of eligibl...
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