How do you invest in a hedge fund?
You need to be an accredited investor (some funds require more), meet the fund's minimum, often $100,000 to $1 million or more, and be accepted. Funds can't take just anyone, and many are closed to new money.
The steps
- Qualify: accredited investor status, or qualified purchaser status (generally $5 million in investments) for many larger funds.
- Find funds: through private banks, wealth advisers, consultants or funds of funds.
- Check them: the adviser's Form ADV on the SEC's adviser search, its track record, fees, lock-up and redemption terms.
- Subscribe: sign the fund's offering documents and wire the money.
Without qualifying
Some mutual funds and ETFs run hedge-fund-like strategies for everyone, and a few investment firms trade publicly. Or follow the funds themselves: their 13Fs show what they own.
Related pages: Build a portfolio from funds' holdings