It is our goal to offer our clients alternative investment
products, such as hedge funds and real estate, that are
appropriate to their risk tolerance, investment goals, and
investment experience. Not all of the products we offer are
appropriate for all prospective investors: various alternative
investments are available only to persons who meet specific
financial requirements. The law requires that we determine each
investor's suitability before we show them specific products.
At the same time that the
Securities and Exchange
Commission is considering whether to
increase its regulation of hedge funds, stakeholders at
universities have begun calling for greater transparency in
university investments.
The call for transparency in
university private equity investments follows on the heels
of corporate
governance and accounting scandals that have afflicted
major public-traded companies - companies that must already
disclose a significant amount of information to the public.
Background: Access to
information and the free market.
After the
1929 stock market crash, the Securities and Exchange
Commission (SEC) was created to “protect investors and
maintain the integrity of the securities markets.” The SEC
works according to a simple principle: disclosure. “All
investors, whether large institutions or private
individuals, should have access to certain basic facts about
an investment prior to buying it,” the SEC maintains, so
that they can reliably “judge for themselves if a company's
securities are a good investment.”[1]
This information also helps members of the public learn
about the companies that play a role in their communities.
Hedge
funds operate outside of this world of shared, independently
verifiable information. The SEC has accordingly restricted
investment in hedge funds to the very wealthy. However,
smaller “retail” investors, as well as colleges and
universities, are beginning to participate in hedge fund
investments, and the hedge fund industry has grown. In
1990, hedge funds managed about $50 billion in assets; in
2003, they managed over $600 billion.[2]
One
consequence of the expansion of the hedge fund industry is
that now, more business is being done by companies about
which there is little public information available. The
SEC has expressed concerns about the numbers of new,
“retail” investors entering this unregulated sphere, but
there are other ramifications to consider. As the capital
controlled by these complex, opaque and little-regulated
companies expands, it may become harder for communities who
are being negatively affected by a company’s business
practices to protect their interests.
This
website compiles information about Lighthouse Capital
Ventures structure, finances, operations and investments to
give investors, university community members, and pension
funds the opportunity to discuss whether, and on whose
terms, they should entrust their money to hedge funds
like Lighthouse Capital Ventures, LLC.
