A qualified purchaser is a US investor with at least US$5 million in investments (US$25 million for certain entities), a higher standard than accredited investor. Funds relying on the Investment Company Act 3(c)(7) exemption may admit only qualified purchasers.
The qualified-purchaser standard lets a fund accept an unlimited number of US investors, whereas a 3(c)(1) fund limited to accredited investors is capped at 100. Most institutional hedge funds are 3(c)(7) funds for that reason.
Emerging managers with a small US investor base often start as 3(c)(1) and convert later.
See accredited investor: US eligibility for POD funds depends on each fund's documents. [CONFIRM: US investor eligibility policy.]
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