From: Jeff Kahler
Sent: February 9, 2007
Subject: File No. S7-25-06

Dear Sirs and Madam:

I have recently read that the SEC is considering raising the net worth limits for accredited investors from $1.0 million to $2.5 million. How many hedge funds even work in this space? Most all hedge funds require such large investments that very few individuals in the lower net worth group (1.0-2.5) ever invest with hedge funds. The only group that you will be hurting is a very small segment of the market that focuses on this group such as I do and the individuals who make up this segment of our population. These are usually local based investment opportunities that are never marketed and rarely even known about. I did do a SEC registration for my fund and am committed to following the law, but from what I have seen, most of these small local investment opportunities simply ignore the SEC rules and operate illegally and under the radar. This proposed change is just going to force more of this.

Most of the investors (all accredited) in my fund are friends that invest only $50-100k and have net worth's between 1.0-2.5 million. Only a few are above this level. I do not know many individuals with very high net worth's. This proposed change will make it nearly impossible for me to run my business. This proposed change will have a very negative affect on this small segment of the market and will do virtually nothing to correct the abuses in the large hedge fund industry.

On a personal basis, my net worth is just about $2.5 million. I got there by investing over many years and I resent that the government would have limited me to public investment funds. I never would have got where I am if I had put my money in mutual funds. This is America. Let us be free to do what we wish with our money, let it be wise or foolish.

Jeff Kahler
Kahler Capital Management, LLC
6245 El Diente Peak Place
Castle Rock, CO 80108