There are trillions of dollars tied up in U.S. hedge funds today. Companies are required to invest millions to even qualify to have a hedge fund of their own, and investors that come to the companies are required to meet certain 'wealth' criteria before they become eligible to invest in the company providing the fund. Every person will invest a different amount of money in hedge funds depending on their specific situation and needs.
In order to get started to determine what you will invest or what you want to invest, you will have to fill out a worksheet that declares your assets, holdings, and investments. You need to have a net worth of more than $1 million as an accredited investor or over $5 million in investments to be a qualified purchaser. Hedge funds are allowed to make all kinds of dangerous investments, which is often why they are required to ask these questions. The SEC does not regulate hedge funds and they probably won't spend a lot of time confirming that someone actually has enough assets.
The typical minimum investment in a hedge fund will be $500,000 to $1 million, depending on the person who is doing the investing. The bigger, more successful funds will have much higher requirements for investment minimums, so make sure that you keep that in mind. If a hedge fund has 100 or more shareholders, you will have to make a larger investment and prove yourself to be a qualified purchaser, not just an accredited investor, to get involved with that particular fund. Once you do become qualified to invest, how much you end up putting in is completely up to you. Take the time to find the amount that you feel comfortable with.
An account manager that works with your hedge fund will usually encourage you to invest as much as you possibly can because they will earn more if you invest more. However, if you don't feel safe investing a larger amount than the minimum or simply don't have the means, you should only invest what you feel capable of offering and not worry about who is pressuring you to invest what. There you have it. Anyone can invest in a hedge fund, but the bare minimum investment that can be made will be between $500,000 and $1 million, and that amount will change depending on the fund and investor circumstances.
