CAZ Investments founder: SEC accredited investor changes provide 'a freedom that is long overdue'

"It's a new paradigm for the average investor to be able to do something they've never been able to do before. To me, that's a freedom that is long overdue." 

Christopher Zook, founder and chief investment officer of CAZ Investments, shared his enthusiasm about the changing SEC regulations for investors while also highlighting his firm’s success in the space, in comments shared exclusively with InvestmentNews.

CAZ Investments, one of the top 120 allocators to private equity globally, announced today that its Strategic Opportunities Fund - created on March 1, 2024 - has now surpassed $250 million in assets. "We are very pleased to say that we delivered 18% net returns to our investors in our first 13 months," Zook told InvestmentNews.

While Zook expressed pride in the fund's performance during its inaugural year, his greater enthusiasm was for the SEC’s regulatory changes, which he believes have opened the door for retail investors to access private equity.

"A couple of weeks ago, the SEC announced they will no longer require investors to be accredited in order to invest," Zook said. The changes, noted by SEC Chairman Paul Atkins during the Practicing Law Institute's conference this past May, effectively eliminate the accredited investor standard that had been in place for the past 23 years. Previously, registered closed-end funds that invested 15% or more in private investment funds were required to enforce a minimum investment of $25,000 and ensure investors met the accredited standard - defined by the SEC as having a net worth over $1 million and an income over $200,000 individually or $300,000 with a spouse.

"The opportunity now is investors can literally own some of the most iconic assets in the world, and they don't have to meet the accredited investor status," Zook said. "They've never been able to do that before." The SEC's direction represents a shift by the regulator towards a more principles-based regulatory approach. 

CAZ Investments, a Houston-based alternative investment firm with over $9 billion AUM, focuses on thematic opportunities, such as ownership stakes in professional sports teams. 

Zook, who partnered with Tony Robbins a year ago to publish the book "The Holy Grail of Investing," said one of the core drivers for his investing philosophy is the idea of a fair playing field. "One of the things Tony Robbins and I really emphasized in the book is that it's not fair for someone to be really smart and well positioned to invest their capital, but not be allowed to because of a rule that is very antiquated." With the SEC's changes, the CAZ Strategic Opportunities Fund is well positioned to capitalize. 

"What we're able to do as a firm is what really investors want to do, which is to find assets that don't correlate," Zook said, a difficult challenge because "much of the investment world today correlates at a very high level. People don't have a lot of options of where to get something that's truly diversified, something that will protect them when the markets get out of sync." 

Zook noted that the changes will also benefit investment advisors who have been constrained by past regulatory standards. "One of the frustrations of financial planners is that their clients want this kind of opportunity, but they haven’t been able to invest before. Now, investors can truly access the most world-class private assets."