Qualified Purchasers (QP)

Qualified purchasers (QPs) are a subset of accredited investors. In the simplest terms, qualified purchasers are investors with at least $5M in assets (excluding their primary residence), although there are other ways to meet the qualifications (listed below).

 

Generally, a qualified purchaser is an investor that meets any of the following criteria:

  • an individual or family-owned business not formed for the specific purpose of acquiring the interest in the fund that owns $5,000,000 or more in investments;
  • a trust not formed for the specific purpose of acquiring the interest in the fund which is sponsored by and managed by qualified purchasers;
  • an individual or entity not formed for the specific purpose of acquiring the interest in the fund which owns and invests at least $25,000,000 in investments (or someone who is acting on account of such a person); or
  • an entity, of which each beneficial owner is a qualified purchaser.

 

Why does this matter?

The SEC has limitations on the number of investors in an investment vehicle (syndicate or fund). A fund or syndicate may only have 249 non-QP investors, while a fund with only QP investors can have up to 1,999 investors.

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