An individual or entity meeting a threshold level of wealth and expertise sufficient to handle the risks or complexity of investments not available to the general public.
In the United States, the Securities and Exchange Commission (SEC) defines qualified purchasers as “sophisticated investors, capable of protecting themselves in a manner that renders regulation by State authorities unnecessary.” The qualified purchaser threshold established by the SEC is currently set at a $5 million USD for individual investors (applicable also to couples, trusts, and other small entities) or $25 million USD for institutions. These thresholds are applicable to ultra-high-net-worth (UHNW) clients, families, and family offices that manage alternative investments to ensure that the standard criteria are met.
The related term accredited investor, also established by the SEC, is a similar designation with a lower threshold level more relevant to high-net-worth (HNW) investors. The accredited investor definition is currently set to require a minimum of $200,000 USD in annual income for individuals ($300,000 for joint income in couples), $1 million USD in net worth, and the presence of certain financial licenses (Series 7, etc.).
See Reference
U.S. Securities and Exchange Commission. “Defining the Term “Qualified Purchaser” Under the Securities Act of 1933. Updated May 25, 2023. www.sec.gov/rules-regulations/2001/12/defining-term-qualified-purchaser-under-securities-act-1933