High-Net-Worth Individuals
High-net-worth individuals is a term used to describe investors with significant net worth and liquidity who in principle understand the risks they are taking and the illiquid nature of hedge fund investing. High-net-worth individuals generally have liquid assets of $1 million or more and overall net worth that exceeds $5 million, although definitions vary.
High-net-worth individuals (HNWI) invest in hedge funds for several reasons:
Absolute returns
Low correlation
Unique strategies
Wide mandates
Protect capital
Star quality
Individual investors who qualify as HNWI generally invest in hedge funds using a financial advisor or private bank. Many financial advisors recommend alternative investments and hedge funds as part of an overall portfolio solution for their clients. Brokerage firm Raymond James, for example, promotes the benefits of alternatives ...
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