What is the Difference Between Accredited Investor and Qualified Purchaser?

The main difference between an accredited investor and a qualified purchaser lies in the criteria they must meet to invest in non-public investments. Here are the key differences:

Accredited Investor:

Meets certain income, net worth, or securities licensing criteria.
Designated under Regulation D of the Securities Act of 1933.
Generally requires an individual to have a net worth of at least $1 million or an annual income of $200,000 ($300,000 jointly with a spouse) for the last two years.

Qualified Purchaser:

Must own at least $5 million of investments, or in the case of a trust, at least $5 million in assets.
Designated under the Investment Company Act of 1940.
Has broader investment opportunities compared to accredited investors, as they can invest in both 3(c)(1) and 3(c)(7) funds.

In summary, while both accredited investors and qualified purchasers can invest in private funds and securities, qualified purchasers have a higher threshold based on the value of their investments and can access a wider range of investment opportunities.

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What is the Difference Between Accredited Investor and Qualified Purchaser?

Comparative Table: Accredited Investor vs Qualified Purchaser

Accredited Investor and Qualified Purchaser are both categories of investors who can access investment opportunities that are not available to the general public. However, there are differences between the two in terms of requirements and investment opportunities. Here is a table comparing the two:

Accredited Investor	Qualified Purchaser
Net worth of at least $1 million (excluding primary residence) or income of at least $200,000 in each of the last two years with the expectation of maintaining the same level in the current year	An individual must have at least $5 million in investments, excluding the value of their primary residence, or own a $25 million investment portfolio together with other qualified purchasers for family investment vehicles
No specific certification or accreditation requirements	Qualified institutional buyers, which are larger entities with over $100 million in securities, can also be qualified purchasers
Can invest in 3(c)(1) funds	Can invest in both 3(c)(1) and 3(c)(7) funds
Generally have less wealth and access to a narrower range of investment opportunities than qualified purchasers	Typically have a higher level of financial sophistication and investment capability, granting them access to a wider range of investments than accredited investors

In summary, while both accredited investors and qualified purchasers can access exclusive investment opportunities, qualified purchasers have broader investment opportunities and are generally considered to have a higher level of financial sophistication and investment capability.

Guilherme Mazui

Guilherme Mazui is graduated in journalism from the Federal University of Minas Gerais (UFMG) and a master's degree in Communication from the University of São Paulo (USP). In addition, he has experience in advertising writing and has worked as a content editor in several companies.