{"id":80,"date":"2008-04-10T06:29:09","date_gmt":"2008-04-10T14:29:09","guid":{"rendered":"http:\/\/www.hedgeco.net\/hedgeducation\/hedge-fund-articles\/what-is-an-accredited-investorqualified-client\/"},"modified":"2009-08-06T07:53:39","modified_gmt":"2009-08-06T15:53:39","slug":"what-is-an-accredited-investorqualified-client","status":"publish","type":"post","link":"https:\/\/www.hedgeco.net\/hedgeducation\/hedge-fund-articles\/what-is-an-accredited-investorqualified-client\/","title":{"rendered":"What is an Accredited Investor?"},"content":{"rendered":"<p>Due to the risky nature of <a href=\"http:\/\/www.hedgeco.net\/\">hedge funds<\/a>, the Securities and Exchange Commission requires that investors meet certain minimum requirements.   An <strong>&#8220;accredited investor&#8221;<\/strong> must meet one of the following prerequisites as defined by the SEC:<\/p>\n<ul>\n<li>a bank, insurance company, registered investment company, business development company, or small business investment company<\/li>\n<\/ul>\n<ul>\n<li>an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million<\/li>\n<\/ul>\n<ul>\n<li>a charitable organization, corporation, or partnership with assets exceeding $5 million<\/li>\n<\/ul>\n<ul>\n<li>a director, executive officer, or general partner of the company selling the securities<\/li>\n<\/ul>\n<ul>\n<li>a business in which all the equity owners are accredited investors<\/li>\n<\/ul>\n<ul>\n<li>a natural person who has individual net worth, or joint net worth with the person\u2019s spouse, that exceeds $1 million at the time of the purchase<\/li>\n<\/ul>\n<ul>\n<li>a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year<\/li>\n<\/ul>\n<ul>\n<li>a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.<\/li>\n<\/ul>\n<p>An accredited investor is not to be confused with a <a href=\"http:\/\/www.hedgeco.net\/hedgeducation\/hedge-fund-articles\/what-is-a-qualified-client\/\">qualified client.<\/a>  While both sets of investors are able to put their money into <a href=\"http:\/\/www.hedgeco.net\/\">hedge funds<\/a>, most states will only let <a href=\"http:\/\/www.hedgeco.net\/hedgeducation\/hedge-fund-articles\/hedge-fund-manager\/\">hedge fund managers<\/a> charge a performance fee (usually 20%) to qualified clients.  This means that accredited investors are only required to pay the management fee (usually 2%).<\/p>\n<ol><font face=\"Verdana,Arial,Helvetica\" size=\"2\"> <\/font><font face=\"Verdana,Arial,Helvetica\" size=\"2\"> <\/font><font face=\"Verdana,Arial,Helvetica\" size=\"2\"> <\/font><font face=\"Verdana,Arial,Helvetica\" size=\"2\"> <\/font><font face=\"Verdana,Arial,Helvetica\" size=\"2\"> <\/font><font face=\"Verdana,Arial,Helvetica\" size=\"2\"> <\/font><font face=\"Verdana,Arial,Helvetica\" size=\"2\"> <\/font><font face=\"Verdana,Arial,Helvetica\" size=\"2\"> <\/font><\/ol>\n","protected":false},"excerpt":{"rendered":"<p>Due to the risky nature of hedge funds, the Securities and Exchange Commission requires that investors meet certain minimum requirements. An &#8220;accredited investor&#8221; must meet one of the following prerequisites as defined by the SEC: a bank, insurance company, registered investment company, business development company, or small business investment company an employee benefit plan, within the meaning of the Employee [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,18],"tags":[54,6,15,55],"class_list":["post-80","post","type-post","status-publish","format-standard","hentry","category-hedge-fund-articles","category-18","tag-accredited-investor","tag-hedge-fund","tag-hedge-fund-manager","tag-qualified-client"],"_links":{"self":[{"href":"https:\/\/www.hedgeco.net\/hedgeducation\/hedge-fund-articles\/wp-json\/wp\/v2\/posts\/80","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hedgeco.net\/hedgeducation\/hedge-fund-articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hedgeco.net\/hedgeducation\/hedge-fund-articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hedgeco.net\/hedgeducation\/hedge-fund-articles\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hedgeco.net\/hedgeducation\/hedge-fund-articles\/wp-json\/wp\/v2\/comments?post=80"}],"version-history":[{"count":0,"href":"https:\/\/www.hedgeco.net\/hedgeducation\/hedge-fund-articles\/wp-json\/wp\/v2\/posts\/80\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.hedgeco.net\/hedgeducation\/hedge-fund-articles\/wp-json\/wp\/v2\/media?parent=80"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hedgeco.net\/hedgeducation\/hedge-fund-articles\/wp-json\/wp\/v2\/categories?post=80"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hedgeco.net\/hedgeducation\/hedge-fund-articles\/wp-json\/wp\/v2\/tags?post=80"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}