Hedge Funds for the Middle-Class? Needs Assessment Research of SEC Mandated Accredited Investor Regulation

Abstract

Individuals below a mandated threshold are prevented from investing in hedge funds (HF). The SEC regulates the HF industry. To qualify as an investor (or receiving "accredited investor" status), a person must apply through the SEC and meet financial requirements. Utilizing an indirect needs assessment, this paper will focus on the need to deregulate this legislation to allow individuals that fall below the mandated threshold to invest in HFs. This paper found that due to the performance of HFs in recessionary markets, relationship between AUM/returns, etc., non-accredited investors should be allowed to partially invest in HFs.