Reuters – Connecticut’s top law enforcement official threw his weight behind a proposal on Wednesday that would require potential hedge fund investors to be wealthier.
“Raising net worth requirements is a critically significant first step toward helping protect vulnerable investors in the higher risk world of hedge fund investment,” Connecticut Attorney General Richard Blumenthal said.
At least one-third of the world’s estimated 9,000 hedge funds are located in Connecticut and Blumenthal has long pushed for greater regulation of the $1.3 trillion industry.
His comments come one day after the U.S. Securities and Exchange proposed raising the “accredited investor standard” for hedge funds to $2.5 million from $1 million where it has been since 1982. This is the amount of money investors have to worth without their real estate holdings to invest in hedge funds or loosely regulated portfolios that use trading techniques that are often off limits at mutual funds.
