When it comes to investing in hedge funds and private equity, these investments are mostly closed to average investors. Too bad. The reason is that these alternative investments diversify portfolios and seek opportunities not available under traditional forms of investing such as mutual funds.
These alternative investment strategies include buying equity in promising firms before they go public, taking advantage of mergers and acquisitions, arbitrage, leverage, currency speculation, and many others.
A major reason for their inaccessibility is investors’ wealth. Most hedge funds have high minimums when it comes to investing in them. Meanwhile, for public equity investments, the Securities and Exchange Commission (SEC) requires that investors be accredited.
To be considered as an accredited investor, an individual must have a net worth of at least $1 million or make $200,000 per year ($300,000 for married couples). This was intended to protect the public from risky investments. But, it also prevents many from investing like the rich do.
This is bound to change. A new proposal seek to qualify experienced investors as accredited individuals without the net worth and income minimums. Brad Reifler, the CEO of Forefront Capital, has just started the Forefront Income Trust. This investment vehicle seeks to pursue alternative investments, all while catering to the middle class.
As Brad announced on Twitter, it only takes $2,500 to invest in this trust, making it accessible for many individuals looking to diversify their portfolios. What’s more, there will be no management fees until the trust makes 8% or more. This is quite rare in this industry as most investment managers charge fees no matter what’s the return.
Forefront Capital is a boutique investment banking and wealth management company that caters to both businesses and individuals. The company was founded by Mr. Reifler back in 2009, according to LinkedIn. Learn more about the company, and the man who founded the enterprise on his official website: http://bradcreifler.com