3(c)(7) Fund
A 3(c)(7) fund is a private fund exemption limited to Qualified Purchasers, typically enabling broader investor counts than 3(c)(1).
Allocator relevance: High — standard for institutional fundraising and a common expectation for larger allocators and family offices meeting QP thresholds.
Expanded Definition
3(c)(7) prioritizes eligibility (QP status) over tight investor-count limits. It is widely used by institutional private funds because it accommodates scale while maintaining strict investor qualification. Allocators still treat it as a structure choice—not an automatic governance guarantee—so they focus on verification, disclosure, and operational discipline.
Decision Authority & Governance
Governance includes QP verification, ongoing eligibility monitoring, transfer controls, documentation consistency across feeder/parallel vehicles, and clear investor communications. Allocators want a defensible verification record and a clear process for changes in investor status.
Common Misconceptions
- 3(c)(7) removes all constraints (eligibility remains strict).
- QP verification is optional.
- 3(c)(7) implies better governance by default.
Key Takeaways
- 3(c)(7) is QP-only—eligibility is the gate.
- Verification and records are critical diligence items.
- Scale is enabled, but governance must still be proven.