From: Larry Groen
I am writing to ask that you not raise the minimum net worth requirement for an accredited investor from $1 million to $2.5 million. I am 46 years old with a net worth of $450,000. Seventy percent of my net worth is in mutual funds, both inside and outside of my retirement portfolios, and are diversified over many asset classes. I am already beginning to study about hedge funds and was looking forward to the day, (approximately 8 years from now), when I would meet the accredited investor requirement and could diversify my portfolio further by putting a small % (5-10) of my portfolio into a hedge fund. Now I come to understand that the SEC is considering changing the minimum net worth requirement from $1 to $2.5 million dollars. The intent is to protect me, because I am not “sophisticated” enough to understand a hedge fund.
I work very hard for my money and have spent the last 20 years saving over 10% of my income in order to have a secure retirement. By limiting my investment choices you actually increase the risk of my investment portfolio compared to someone of a higher net worth. It’s not right. For you to suggest, that because I have a lower net worth than Paris Hilton & Nicole Ritchie, I am a less sophisticated investor, is an absolute insult! They have advisors, I have advisors. They were just born into wealthy families. This rule goes against the idea of America, the land of opportunity.
I hope you reconsider your recommendation and in fact open up the hedge fund options through mutual funds of hedge funds so that investors like myself would have the same opportunities as the wealthy.