New HF qualified investor rules... 88% less households now qualify

[drsteph]

More important that who is screwing who is what this means.

Decreased access to hedge funds means decreased access to managed money to play both the long and short side of the market.

This means:
1. Reduced volatility
2. Dampening of the use of sophisticated derivative strategies for speculative purposes.
3. Reduced access to market short strategies and non-traditional investments.
4. Reduced access to private equity plays.
5. Possibly reduced access of US funds to offshore type accounts.

And again, more importantly,

More reliance upon mutual fund type investments to play the market from a long bias, giving further support to maintaining assets at current values.

You may draw your own conclusions.

 

[nutmeg]

So where does the Fortress Invesment Group IPO fit into the picture.

A hedge fund IPO.

 

[toc]

private equities have been hot lately and they also focus on accredited investors although the real big ones like foundations and corporate pension funds. but some new start ups seek investors with $250K and up type of interests, with this rule private equity business will also be rattled to some extent. not good for the investments industry.

it would have been better if SEC had introduced a hurdle rate for the incentives taken by the fund managers. This way, anything over 8 or 9% annually will qualify for 20% incentive otherwise 2% AUM fees should be good enough.

 

[Butterball]

Four years of outperformance by the SP500 vs. HFRI certainly doesn't help attract money of private individuals that tend to look at returns more than risk. I doubt lifting the barrier for US individuals makes any different anyways.

Most new money still comes from Asia, Russia and the Middle East (in this order).

 

[stonedinvestor]

I missed the cut at one million-( if you subtract my apartment from net worth) I'll miss the cut at 2.5, F them. I like money management anyway... They say it's to protect the little investor, but it's more the reality that the SEC can't patrol these guys and some crooks will set up shop and steal your money. I don't think it's really about sophistication of investments and risk and all that-- just like a mutual fund those qualities are easily discerned....