Term of the Day
an
investment company with less than 100 investors. The
term is also used to describe an
investment company the
members of which have substantial
funds invested elsewhere. These funds usually do not make any
public offerings. Private investment funds are exempt from federal
securities regulations as their wealthy
individual investors are thought to be sophisticated enough to not require the same level of regulatory protection as small investors do. A common example of a private investment fund is a
hedge fund.