what is a private investment fund 
a private investment fund is an investment company that does not solicit capital from retail investors or the general public members of a private investment company typically have deep knowledge of the industry as well as investments elsewhere to be classified as a private fund a fund must meet one of the exemptions outlined in the investment company act of 1940 the 3c1 or 3c7 exemptions within the act are frequently used to establish a fund as a private investment fund there is an advantage to maintaining private investment fund status as the regulatory and legal requirements are much lower than what is required for funds that are traded publicly understanding a private investment fundprivate funds are expected to meet certain criteria to keep their status generally the requirements limit both the number and type of investors that can own shares in the fund in the u s under the aforementioned investment company act of 1940 a 3c1 fund can have up to 100 accredited investors and a 3c7 fund can have a soft limit of around 2 000 qualified investors both the definition of qualified and accredited investor come with individual wealth tests accredited investors need to have more than 1 million in net worth without counting their primary residence and or 200 000 in annual income for an individual and 300 000 for a couple qualified investors have to hold assets in excess of 5 million 