Qualified Purchaser
Secondary & Pre-IPO Markets
Definition
A higher investor eligibility category under the Investment Company Act, commonly associated with individuals or family-owned entities holding at least $5 million in investments and entities with at least $25 million in investments. Many 3(c)(7) private funds limit investors to qualified purchasers.
Why it matters
Qualified purchaser status opens access to funds that are unavailable to merely accredited investors. In platform diligence, the QP requirement often signals a 3(c)(7) structure, higher minimums, more complex documents, and a narrower investor base.
Common misconceptions
- •Qualified purchaser is not the same as accredited investor; it is generally a higher threshold.
- •Net worth and investments are not always the same measure.
- •QP status does not make a private fund lower risk.
Technical details
Where it appears
QP requirements often appear in private equity funds, venture funds, hedge funds, feeder funds, and certain pre-IPO access vehicles structured under Section 3(c)(7).