# kaal:claim:2739479-009

**Claim.** Smaller private funds spend more on compliance than larger ones, both as a share of AUM and relative to operating costs, which means increasing regulatory scrutiny falls disproportionately on smaller funds.

**Type.** failure  **Support.** evidenced

**Holds when.**

- private fund advisers subject to Dodd-Frank compliance obligations
- compliance measured as share of AUM and of operating costs

**Source quote.**

> Smaller private funds spend more on compliance costs than their larger counterparts—both as a percentage of AUM and in relation to oper- ating costs; this suggests that increasing regulatory scrutiny disproportionately impacts smaller funds.

**From.** Wulf A. Kaal, *The Post Dodd-Frank Act Evolution of the Private Fund Industry Comparative Evidence from 2012 and 2* (2016), II.1. Private Fund Industry Trends, page 18

**Cite as.** Wulf A. Kaal, The Post Dodd-Frank Act Evolution of the Private Fund Industry Comparative Evidence from 2012 and 2 (2016). SSRN: https://ssrn.com/abstract=2739479

**Verify.** sha256 of source PDF `b2e7b81a16ab01c73478b62e85068f9dadc5cdd18427241e8bc5e8216a967730` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202016%20-%20The%20Post%20Dodd-Frank%20Act%20Evolution%20of%20the%20Private%20Fund%20Industry%20Comparative%20Evidence%20from%202012%20and%202.pdf

**Failure mode.** Regressive compliance burden  (family: compliance-cost-and-barrier-to-entry)

**Topics.** compliance

**Keywords.** compliance-costs, scale-effects, small-funds, regulatory-burden, dodd-frank-act

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