Investment Management

By: Irwin M. Latner and Patrick D. Sweeney
Herrick, Feinstein LLP., New York, New York, USA

As a follow-up to our recent alert on the implications of the Private Fund Investment Advisers Registration Act of 2010 for private investment funds, we want to highlight certain provisions which may have an immediate on fund's offering documents. The Act includes provisions that adjust the "accredited investor" standard used to ascertain whether individual investors qualify under the SEC's Regulation D private offering exemption to invest in certain privately offered funds. These changes may exclude certain previously qualified individual investors from investing in hedge and private equity funds—in particular, funds with fewer than 100 investors that rely on the Section 3(c)(1) exemption from registration under the Investment Company Act of 1940.

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