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The JOBS Act Frees Hedge Funds to Advertise
The New York Times | April 05, 2012 | 04:32 PM EDT

“I think the impetus for this act is to modernize a lot of these rules to bring them in line with 21st-century practices,” said Steven Nadel, a partner at the law firm Seward & Kissel.

One rule that will not be affected is the restriction on who can give money to hedge funds and private equity firms. Firms will still only be able to accept money from individuals with more than $1 million of money to invest. And although the money managers may be allowed to advertise their returns, they will probably not be required to do so, meaning that investors could get an overly rosy view of the industry.

For the larger funds, the new law may not change much. Slick 30-second commercials from major hedge funds like Paulson & Company, the $24 billion fund run by John A. Paulson, are unlikely to start appearing on network television: for the bigger players, the client base is largely institutional, and therefore less swayed by mass marketing.

“The big takeaway is that it wouldn’t impact me one way or the other,” said John Brynjolfsson, head of the hedge fund Armored Wolf, which manages about $800 million in largely institutional assets. “This doesn’t sound like it would have a major impact on how we do our business.”

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