A qualified purchaser is an individual or entity that meets specific financial and sophistication standards set by the SEC, allowing them to invest in certain securities and private funds—including venture capital funds, private equity funds, and hedge funds.
The requirements are defined under Section 2(a)(51) of the Investment Company Act of 1940. The criteria vary depending on whether you’re an individual investor, trust, family office, or investment manager. The requirements also vary depending on the type of security or investment product being purchased.
To be a qualified purchaser, the following threshold(s) must be met.
Individuals and married couples: At least $5 million or more in investments or joint investments, excluding their primary residence or business property.
Family offices: At least $5 million in investments.
Investment managers: At least $25 million in investments managed for other qualified purchasers.
Trusts: A trust whose trustee and all settlors are qualified purchasers, or certain types of trusts that have at least $5 million in investments, would also qualify.