A Qualified Purchaser is a type of investor that meets certain financial criteria and is permitted to invest in certain types of securities that are not available to the general public. The definition of Qualified Purchaser is set forth in the Investment Company Act of 1940, as amended, and includes individuals and entities that meet one of the following criteria:
An individual who owns at least $5 million in investments, including securities, cash, and other assets.
An entity that owns and invests on a discretionary basis at least $25 million in investments, including securities, cash, and other assets.
An entity that is owned exclusively by Qualified Purchasers.
A family-owned company that owns and invests on a discretionary basis at least $5 million in investments, and that has a family member who is a Qualified Purchaser.
Qualified Purchasers are typically high-net-worth individuals, family offices, institutional investors, and other entities that have significant investment resources and financial expertise. They are permitted to invest in certain types of private funds, including hedge funds, private equity funds, and venture capital funds, that are not available to the general public. The SEC has established the Qualified Purchaser criteria to determine whether an investor has the financial sophistication and resources to understand and bear the risks associated with investing in these types of securities.
Qualified Purchaser is a more stringent requirement than accredited investor.