Our Members
Membership Criteria
Access to Destiny Access is limited to Qualified Purchasers. Qualified Purchaser is a specific legal standard under federal securities law, not a marketing label. This page explains what the term means, the categories it covers, and what qualifying does and does not mean for access
Qualified Purchaser
A Qualified Purchaser is an individual, trust, family-owned company, or other entity that meets certain eligibility standards under the Investment Company Act of 1940.
Qualified Purchaser status is often required for certain private funds that rely on Section 3(c)(7) of the Investment Company Act.
In general, a Qualified Purchaser may include:
- An individual who owns at least $5 million in qualifying investments.
- A family-owned company that owns at least $5 million in qualifying investments.
- Certain trusts, provided the trust was not formed specifically to invest in the offering and the trustee or other decision-maker, along with each person who contributed assets to the trust, meets the applicable Qualified Purchaser requirements.
- A person or entity that owns and invests at least $25 million in investments on a discretionary basis, either for its own account or for the accounts of other Qualified Purchasers.
Certain institutional investors may also qualify under separate SEC rules, including rules that treat some Qualified Institutional Buyers as Qualified Purchasers when applicable. Institutional investors should consult the relevant rules and offering documents to confirm their status.
Important Note: Meeting the Qualified Purchaser standard does not mean that any private investment, alternative investment, or Destiny Access opportunity is suitable, recommended, available, or appropriate for a particular investor. Each opportunity should be reviewed based on its terms, risks, fees, liquidity limits, tax considerations, and the investor’s broader financial picture.
Qualified Investments
Individual Investors
An individual may qualify as a Qualified Purchaser if they own at least $5 million in qualifying investments, as defined by SEC rules. This is not a total net worth test. The calculation generally focuses on investment assets, not personal-use assets.
Qualifying investments generally include:
- Stocks, bonds, mutual funds, ETFs and other securities
- Interests in private funds and certain private companies
- Investment real estate
- Commodity interests and qualifying physical commodities held for investment
- Swaps and certain other financial contracts held for investment
- Cash and cash equivalents held for investment
- Certificates of deposit and similar bank instruments held for investment
- The net cash-surrender value of an insurance policy
- Directed IRA and similar retirement-account investments
Assets such as a primary residence, personal-use property, vehicles, household property, and personal-use collectibles generally should not be counted toward the $5 million threshold.
When spouses are investing jointly, the SEC rule permits each spouse’s separately owned investments to be included in determining their combined status. When only one spouse is investing individually, jointly owned property may be counted, but the other spouse’s separately owned assets ordinarily should not simply be added unless the questionnaire’s joint-investment provisions apply.
Family-owned company
A family-owned company or entity may qualify if it owns at least $5 million in qualifying investments and is owned directly or indirectly by or for certain related family members. This may include spouses, former spouses, siblings, direct lineal descendants, ancestors, certain spouses of those descendants or ancestors, estates, foundations, charitable organizations, or trusts established for their benefit.
This category may apply to certain family LLCs, family limited partnerships, family investment entities, or similar structures. The entity itself must meet the applicable requirements. The personal wealth of one person connected to the entity is not enough by itself.
Trust
A trust may qualify as a Qualified Purchaser, but the analysis depends on the trust structure.
A trust that does not qualify as a family-owned company may qualify if:
- The trust was not formed specifically to acquire the offered investment.
- The trustee or other person authorized to make investment decisions is a Qualified Purchaser.
- Each settlor or other person who contributed assets to the trust is a Qualified Purchaser.
This trust category is different from the individual $5 million test. The review may need to look at the trustee, investment decision-maker, grantor, settlor, and anyone who contributed assets to the trust.
Institutional or Other Large Investors
Certain entities, investment managers, or other persons may qualify if they own and invest on a discretionary basis at least $25 million in qualifying investments, either for their own account or for the accounts of other Qualified Purchasers.
This is not simply an assets-under-management test. The review focuses on qualifying investments that are owned and invested on a discretionary basis.
In some cases, a company or entity may be treated as a Qualified Purchaser if each beneficial owner of the entity’s securities is also a Qualified Purchaser. This type of structure usually requires additional review because the analysis may need to look through the entity to its owners.
This is especially important when an entity was formed specifically to make the investment.
FAQs
Yes, but trust qualification depends on the facts. The review may need to consider whether the trust was formed for the investment, who makes investment decisions for the trust, and whether each settlor or contributor is a Qualified Purchaser.
Yes, certain family-owned companies or entities may qualify if they own at least $5 million in qualifying investments and meet the family ownership requirements. Other entities may qualify under different rules, including certain entities owned entirely by Qualified Purchasers.
Not necessarily. The individual test generally requires at least $5 million in qualifying investments. Total net worth may include assets that do not count toward the Qualified Purchaser threshold.
Generally, no. A primary residence is not typically counted as a qualifying investment for Qualified Purchaser purposes.
Meeting the definition of a Qualified Purchaser establishes that an individual or entity satisfies the legal eligibility requirements for certain private investment opportunities. It does not mean that every investment available to Qualified Purchasers is suitable or appropriate for that investor. Qualified Purchaser status is based primarily on financial and ownership criteria, not on an evaluation of the investor’s objectives, risk tolerance, liquidity needs, time horizon, portfolio concentration, tax circumstances, or ability to withstand a substantial or complete loss.
No. Qualified Purchaser status only establishes legal eligibility. It does not mean that a private investment is suitable, appropriate, recommended, or consistent with your financial circumstances. Each investment should be reviewed separately.
No. The legal subscriber matters. If the investment is being made by a trust, LLC, partnership, or other entity, that entity must be reviewed under the applicable rules. Your personal Qualified Purchaser status may be relevant, but it does not automatically qualify the entity.
No. These are different standards. Accredited investor status is often relevant for private offerings under Regulation D. Qualified Purchaser status is often relevant for certain private funds relying on Section 3(c)(7) of the Investment Company Act. Some investments may require one standard, both standards, or other eligibility requirements.
Qualified Purchaser status is based on qualifying investments, not total wealth or total net worth.
Qualifying investments generally may include:
- Stocks, bonds, mutual funds, ETFs and other securities
- Interests in private funds and certain private companies
- Investment real estate
- Commodity interests and qualifying physical commodities held for investment
- Swaps and certain other financial contracts held for investment
- Cash and cash equivalents held for investment
- Certificates of deposit and similar bank instruments held for investment
- The net cash-surrender value of an insurance policy
- Directed IRA and similar retirement-account investments
Assets that generally should not be counted include:
- Primary residence
- Personal-use real estate
- Vehicles
- Household property
- Personal-use collectibles
- Other assets that do not fall within the SEC’s definition of qualifying investments
Because the calculation is specific, investors should not assume they qualify based only on overall wealth.
If an opportunity is limited to Qualified Purchasers, an investor who does not meet the requirements generally cannot participate in that opportunity. Other investment opportunities may have different eligibility requirements.
A questionnaire helps determine whether the individual, trust, or entity making the investment meets the applicable Qualified Purchaser requirements. For certain private funds, this review is necessary before an investor can participate.