Skip to content
GetProfitable
Search
Dictionary

Qualified purchaser

A higher US wealth threshold, generally $5 million in investments for individuals, that lets a private fund rely on the 3(c)(7) exemption without a 100-investor cap.

Where accredited-investor status is the entry ticket to private offerings, qualified purchaser status determines the fund's own structure. A 3(c)(1) fund may accept accredited investors but is limited in number; a 3(c)(7) fund may take an effectively unlimited number provided every investor is a qualified purchaser.

The individual test is $5 million in investments, not net worth, so an illiquid business or a house does not count. Entities generally need $25 million in investments managed for others.

A related but distinct concept is the qualified eligible person used by commodity-pool-operator funds under CFTC rules, which mixes wealth with trading experience. Fund documents frequently require both.

Related: accredited-investor, investment-company-act-1940, commodity-pool-operator, private-placement-regulation-d

Educational only, not advice. Spotted an error? Post in Site Feedback.