# kaal:claim:2998097-018

**Claim.** 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.

**Type.** failure  **Support.** argued

**Holds when.**

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

**Source quote.**

> 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

**From.** 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?, page 32

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

**Verify.** sha256 of source PDF `0955054f49c7011d33c285579bb046e6b284e42755b10fd2546a728c202669d5` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202017%20-%20Private%20Investment%20Fund%20Regulation%20-%20Theory%20and%20Empirical%20Evidence%20from%201998%20to%202016.pdf

**Failure mode.** Scale economies in compliance as barrier to entry  (family: compliance-cost-and-barrier-to-entry)

**Topics.** risk-and-incentives

**Keywords.** barriers-to-entry, returns-to-scale, consolidation, small-advisers

**Related claims.**

- extends: https://wulfkaal.github.io/claims/2389423-007
- contests: https://wulfkaal.github.io/claims/2389423-010
- extends: https://wulfkaal.github.io/claims/2389423-003
- extends: https://wulfkaal.github.io/claims/2714974-040
- supports: https://wulfkaal.github.io/claims/2389423-008
- extends: https://wulfkaal.github.io/claims/2739479-040

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.