Qualified Purchaser
A qualified purchaser is a U.S. legal category of investor (generally very high net worth) that is eligible for certain private fund offerings under the Investment Company Act.
Allocator relevance: A hard eligibility gate—many private funds require qualified purchaser status, not just accredited investor.
Expanded Definition
Qualified purchaser is a higher threshold than accredited investor and is commonly required for 3(c)(7) funds. The category includes certain individuals and entities meeting specific investment asset thresholds and rules. For allocators, qualification affects who can invest, how vehicles are structured, and what onboarding documents are required.
Because this is legal classification, accuracy and documentation are critical.
How It Works in Practice
Investors certify status in subscription documents and may provide supporting evidence. Managers and administrators maintain records for compliance.
Decision Authority and Governance
Compliance teams verify eligibility, and legal teams ensure correct offering exemptions. Internal policy may require additional checks beyond regulatory definitions.
Common Misconceptions
- Accredited investor equals qualified purchaser.
- Qualified purchaser status is optional.
- It can be assumed without documentation.
Key Takeaways
- It is a legal gating condition for many funds.
- Documentation and compliance controls matter.
- Understand which exemption the fund is using.