Comments on: New proposed accredited investor definition specifically for hedge funds http://truthonthemarket.com/2007/02/12/new-proposed-accredited-investor-definition-specifically-for-hedge-funds/ Academic commentary on law, business, economics and more Sat, 02 Jun 2012 12:17:14 +0000 hourly 1 http://wordpress.com/ By: Mark Astarita http://truthonthemarket.com/2007/02/12/new-proposed-accredited-investor-definition-specifically-for-hedge-funds/#comment-6570 Sun, 18 Feb 2007 16:18:56 +0000 http://www.truthonthemarket.com/2007/02/12/new-proposed-accredited-investor-definition-specifically-for-hedge-funds/#comment-6570 I think it is important to note that the “accredited natural person” definition applies only to hedge fund investments, it does not alter the definition of accredited investor for Reg D purposes.

I believe we will see that this is much ado about nothing. The large hedge funds that everyone reads about in the newspaper are not taking investments from “accredited natural persons.” With investment minimums in the millions of dollars, those who meet that definition on the low end do not have sufficient funds to meet the minimums.

Perhaps the Commission will keep Mom and Pop from investing in the smaller hedge funds, but that is nothing new. There has always been a definition of accredited investor that keeps Mom and Pop out of hedge funds (and most private placements for that matter).

So, while the objections to the government’s paternal approach are well taken, nothing much is going to change…nor should it, IMHO.

]]> By: Jay Knight http://truthonthemarket.com/2007/02/12/new-proposed-accredited-investor-definition-specifically-for-hedge-funds/#comment-6569 Tue, 13 Feb 2007 12:44:45 +0000 http://www.truthonthemarket.com/2007/02/12/new-proposed-accredited-investor-definition-specifically-for-hedge-funds/#comment-6569 At the SEC Speaks Conference last week, the staff said that most of the 200 comments they’ve received regarding this proposal have been negative.

]]> By: Bob Smith http://truthonthemarket.com/2007/02/12/new-proposed-accredited-investor-definition-specifically-for-hedge-funds/#comment-6568 Tue, 13 Feb 2007 05:59:44 +0000 http://www.truthonthemarket.com/2007/02/12/new-proposed-accredited-investor-definition-specifically-for-hedge-funds/#comment-6568 This will do more than hurt hedge funds, it will kill small private business investment. Small business offerings don’t make sense as registered offerings because of the minimum $50-100k in legal and consulting fees to do one. Raising the minimum net worth requirement means most unregistered offerings will now have to be registered. In other words, they won’t happen at all. Not that the SEC cares; their constituency consists mostly of large and small brokerage houses, who don’t earn commissions on unregistered private offerings. Registered offerings are almost always sold through brokerage houses. It’s also bad for both investors and businesses, since brokerages usually want as much as 10-15% of capital as their fee, leaving that much less money available for actual business use.

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