kaal:claim:2998097-018

Because Title IV compliance costs bring increasing returns to scale and therefore favor larger firms, Title IV may create barriers to entry for smaller private fund advisers, forcing them out of the market or into consolidation with other advisers.

In other words, if Title IV compliance costs bring increasing returns to scale because the costs of Title IV compliance favor larger firms, Title IV requirements may contribute to the creation of barriers to entry for smaller private fund advisers.135 This author demonstrated

Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017), IV.1.e What Drives Dodd-Frank Act Compliance Costs for Private Funds?, p. 32
https://ssrn.com/abstract=2998097 · source PDF

Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097

• smaller private fund advisers
• if Title IV compliance costs bring increasing returns to scale

failuresupport: arguedfailure: Scale economies in compliance as barrier to entryfamily: compliance-cost-and-barrier-to-entryrisk-and-incentives

• extends kaal:claim:2389423-007 A disproportionate effect of Title IV on startup hedge funds and smaller advisers could create barriers to mar...
• contests kaal:claim:2389423-010 Because there is no evidence of an inverse relationship between adviser size and per-unit compliance cost, ind...
• extends kaal:claim:2389423-003 Anecdotal evidence suggests that Title IV of the Dodd-Frank Act more than doubled the market entry threshold r...
• extends kaal:claim:2714974-040 Higher compliance costs from hedge fund regulation can create barriers to entry for new market entrants and ca...
• supports kaal:claim:2389423-008 A surplus of larger private fund advisers holding correspondingly larger amounts of assets under management co...
• extends kaal:claim:2739479-040 Barriers to entry for small firms are becoming an increasing problem in the private fund industry under the ev...

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