Qualified Purchaser

The qualified purchaser designation exists under a different section of U.S. securities law than the accredited investor standard. While accredited investor status opens the door to many private placements, QP status is required for certain investment funds — particularly those relying on a specific exemption from registration under the Investment Company Act. In practice, many institutional-quality hedge funds and private funds require QP status from their investors.

As with accredited investor status, the specific asset thresholds and entity rules that define a qualified purchaser are set by regulators and can change. This article states no specific figures. Families should work with qualified attorneys to assess whether a family office entity, a trust, or individual family members meet the standard at the time of any specific investment.

For a family whose wealth is held across multiple entities — operating businesses, trusts, and investment vehicles — determining QP status can involve careful analysis of which assets count and how entities are structured. The legal entities a family uses can affect eligibility in meaningful ways.

A common confusion is treating accredited investor and qualified purchaser status as interchangeable. They are not. Every QP is generally also an accredited investor, but not every accredited investor qualifies as a QP. The distinction matters most when a family is evaluating access to specific alternative investment vehicles during manager selection.