Posts tagged as:

qualified purchaser

Qualified Eligible Person (QEP) Definition

December 24, 2009

The securities laws can be written obtusely and the definition of a qualified eligible person (QEP) may be one of the best examples of this.  There is no quick and easy definition of a what a QEP is so we are trying to make it as easy as possible to understand.  This post discusses the [...]

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Hedge Fund Investors Overview

October 15, 2008

The lifeblood of the hedge fund industry are hedge fund investors, those persons and institutions which put their money at risk with the hope of generating positive investment returns.  While there have been recent predictions of large amounts of investor money leaving the hedge fund space due to poor performance, there are many potential hedge [...]

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Section 3(c)(7) Hedge Funds

October 14, 2008

Almost all hedge funds which trade securities are deemed to be “investment companies” under the Investment Company Act of 1940.  All “investment companies” are required to register under the Investment Company Act (like all mutual funds must do) unless the “investment company” falls within an exemption from the registration provisions.
A 3(c)(7) hedge fund is exempt [...]

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What happens if a hedge fund doesn’t do proper diligence to ascertain that a client meets the qualified purchaser standards?

September 24, 2008

This question came to us yesterday:
Question: What happens if a hedge fund doesn’t do proper diligence to ascertain that a client meets the qualified purchaser standards? Does the hedge fund have to register or notify the SEC?
Answer: In practice I don’t know how this would happen unless someone at the hedge fund management company was [...]

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What is a qualified purchaser?

September 18, 2008

We have previously discussed the difference between a 3(c)(1) hedge fund and a 3(c)(7) hedge fund. Unlike a 3(c)(1) hedge fund where investors only generally need to be accredited investors and potentially qualified clients, all investors in a 3(c)(7) hedge fund must be “qualified purchasers.” A qualified purchaser is a greater requirement than [...]

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