Accredited Investor
A term used by the Securities and Exchange Commission (SEC) under Regulation D to refer to investors who are financially sophisticated and have a reduced need for the protection provided by certain government filings. Also known as "qualified purchaser".
Investopedia Commentary
In order for an individual to qualify as an accredited investor, he or she must accomplish at least one of the following:
1) earn an individual income of more than $200,000 per year, or a joint income of $300,000, in each of the last two years and expect to reasonably maintain the same level of income.
2) have a net worth exceeding $1 million, either individually or jointly with his or her spouse.
3) be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.
These investors are considered to be fully functional without all the restrictions of the SEC.
Related Links
Introduction To Hedge Funds - Part One
Funds of Hedge Funds - Higher Costs and Risks for Higher Potential Returns
See also: 3C7, Hedge Fund, Institutional Investor, Qualified Institutional Buyer - QIB, Regulation D, Retail Investor, Securities and Exchange Commission - SEC
accredited investor