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Northwestern Journal of International Law Business Volume 29 Issue 3 Summer Summer 2009 Coming Together after the Crisis: Global Convergence of Private Equity and Hedge Funds Houman B. Shadab Follow this nd dditional works t : http://schol rlycommons.l /njilb P rt of the T x L w Commons Recommended Cit tion Houm n B. Sh d b, Coming Together fter the Crisis: Global Convergence of Priv te Equity nd Hedge Funds, 29 Nw. J. Intl L. Bus. 603 (2009) This Article is brought to you for free nd open ccess by Northwestern University School of L w Schol rly Commons. It has been ccepted for inclusion in Northwestern Journal of Intern tional L w Business by n uthorized dministr tor of Northwestern University School of L w Schol rly Commons. Coming Together After the Crisis: Global Convergence of Private Equity and Hedge Funds Houman B. Shadab* INTRODUCTION Two of the most significant types of alternative investment funds worldwide are hedge funds and private equity funds. A hedge fund typically engages in short-term trading of financial instruments and compensates its manager on an annual or quarterly basis. A private equity fund typically takes long-term management positions in companies and compensates the fund manager once every several years upon the sale of the funds assets. Although primarily centered in the United States and Europe, numerous markets worldwide are home to each type of fund. Prior to the subprime mortgage-initiated financial crisis, there was a trend within the alternative investment sector toward the convergence of strategies and structures of certain private equity and hedge funds. This article suggests that although the financial crisis will slow the process of convergence