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Hedge Funds for the Rich(er)

News out just moments ago that the Securities and Exchange Commission is raising the minimum requirements for so-called "accredited investors." It gets bumped up to $2.5m from $1m, where it had stood unchanged since 1982.

Raising this requirement was largely expected, but here's why the move is so important: the real estate boom and its legions of newly minted millionaires. At a hedge fund event in the home state of hedge funds, Connecticut, one representative from the state banking commission said there are entire zip codes now filled with accredited investors. Ditto that for many regions across the country that have seen tremendous increases in property values.

The minimum requirement of $2.5m no longer includes that asset that represent the net worth of so many Americans these days. It does not include primary residences or property from which the owners' business is run. That makes $2.5m a truer value of net worth for the purposes of determining whether this is money that individuals can afford to lose in hedge fund investments.

But the issue of regulation and requirements for hedge funds is far from over. Yet to be seen: whether Congress or the SEC steps in.

Questions? Comments? PowerandMoney@cnbc.com