Is the fund relying on Section 3(c)(7) to avoid registration as an investment company? – Preserving the exemption

If the fund is relying on the Section 3(c)(7) exemption to avoid registration as an investment company under the 1940 Act, each investor must be a “qualified purchaser.” The term qualified purchaser is defined to include:

  • any natural person who owns not less than $5,000,000 in investments;
  • any company that owns not less than $5,000,000 in investments and that is owned directly or indirectly by or for 2 or more natural persons who are related as siblings or spouse (including former spouses), or direct lineal descendants by birth or adoption, spouses of such persons, the estates of such persons, or foundations, charitable organizations, or trusts established by or for the benefit of such persons;
  • any trust that is not covered by clause (ii) and that was not formed for the specific purpose of acquiring the securities offered, as to which the trustee or other person authorized to make decisions with respect to the trust, and each settlor or other person who has contributed assets to the trust, is a person described in clause (i), (ii), or (iv); or
  • any person, acting for its own account or the accounts of other qualified purchasers, who in the aggregate owns and invests on a discretionary basis, not less than $ 25,000,000 in investments.