Are Dodd-Frank Act compliance costs forcing smaller private investment fund advisers out of the market? Wulf Kaal, Associate Professor at the University of St. Thomas School of Law, decided to take a look at the data and see.
It should come to no surprise that the answer is likely: yes.
The analysis in this paper shows that the number of funds managed by private fund advisers is associated with Dodd-Frank Act compliance cost. The findings of this study demonstrate that the number of funds managed by a private investment fund adviser affect the compliance costs under Title IV of the Dodd-Frank Act.
The results of this study also show that adviser size as measured by AUM is not associated with Title IV compliance cost and other independent variables as proxies for cost, such as time, required for complying with Title IV. Smaller firms in the sample of this study have, in the aggregate, larger Title IV compliance costs than larger funds.
Sources:
- What Drives Dodd-Frank Act Compliance Cost for Private Funds? by Wulf Kaal in The CLS BLue Sky Blog
- “What Drives Dodd-Frank Act Compliance Cost for Private Funds?” (pdf)
