A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market

by Edward O. Thorp

Should you invest in hedge funds? First you need to determine if you’re economically qualified. Though such funds typically require a minimum investment of $250,000 or more, some start-ups will relax this to $50,000 or $100,000 when they first raise money. The original reason to require a substantial minimum investment was historical. In order to qualify for certain exemptions from securities regulations, and thereby gain the freedom to make a wide range of investments, hedge funds had to limit themselves to fewer than one hundred partners. But then, in order to have a pool of tens or hundreds of millions of dollars, the fund had to avoid filling their quota of partners with small investors.