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 fund’s 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, the trend toward convergence will ultimately continue and strengthen, albeit in some ways along a different trajectory than before and with some important variations across national boundaries.