Hedge fund charge performance fees for accredited investors 1m net worth
IAR charge fulcrum fees for qualified investors 2.2 m networth and 1.1 with broker.
This is a bit confusing why lower bar for a more risky hedge fund investment , and the two bars seem to conflict ? Could you explain the rationale and how to think about this
Good question, @Ernesto_Bahringer. Best I can offer - it just is what it is. The regulators and legislators believe it’s important to enforce minimum financial standards for both performance-based fees and private placements. As for the specific thresholds, there is no clear reason for the differences. These rules were written at different times and are enforced separately.
It is a bit bizarre, though. I assume there’s more risk involved with private placement investments like hedge funds than with an account subject to performance fees.