Hedge funds are only allowed to manage the money of accredited investors, people with over $1 million in assets and sophisticated financial knowledge and experi

Hedge funds are only allowed to manage the money of accredited investors, people with over $1 million in assets and sophisticated financial knowledge and experience. So when a hedge fund screws up, its investors might have to put off getting a new Ferrari for a year or two, but no one is ending up destitute.