Experienced Investors

Experienced Investors

UK and EU equivalent to Accredited Investors

“Experienced Investors” are almost the exact same as “Accredited Investors,” the only difference is that term is strictly used in Europe and the UK. Although they are different, they have the same purpose of protecting companies from investors or institutions that may be risky.

For an investor to be able to make an investment in a company, the business issuing the securities will make sure that the prospective source of their future capital will meet the requirements that make up an experienced investor. Often, the company won’t even let the prospective investor view their documents until they ensure that the investor is reliable. The pre-requisites for such an investor are contained in the Financial Services Regulations, or Experienced Investor Funds, of 2012. These requirements are outlined in the subsequent categories:

(a) A person or partnership whose ordinary business or professional activity includes, or it is reasonable to expect that it includes, acquiring, underwriting, managing, holding or disposing of investments, whether as principal or agent, or the giving of advice concerning investments; or

(b) a body corporate which has net assets in excess of €1,000,000 or which is part of a group which has net assets in excess of €1,000,000; or

(c) an unincorporated association which has net assets in excess of €1,000,000; or

(d) the trustee of a trust where the aggregate value of the cash and investments which form part of the trust’s assets in excess of €1,000,000; or

(e) an individual whose net worth, or joint net worth with that person’s spouse, is greater than €1,000,000, excluding that person’s principal place of residence; or

(f) a participant who has a current aggregate of €100,000 invested in one or moreexperienced investor funds; or

(g) a participant who invests a minimum of €50,000 in an experienced investor fund and who has been advised by a professional adviser to invest in the fund and the fund’s administrator has received confirmation of such advice; or

(h) a participant who is a professional client, as defined under the Financial Services (Markets in Financial Instruments) Act 2006; or

(i) a participant in a fund that has re-domiciled to Gibraltar where the Authority has permitted the inclusion of such participant either in respect of a specific fund or generally in respect of funds or a category of funds from a certain jurisdiction.

The minimum investment for an Experienced Investor who does not fall within subparagraphs (a) to (i) above is €100,000 or its foreign currency equivalent.

In standard procedure, an offering document such as a prospectus or memorandum will declare that their securities will not be offered to the public, and that they will only be available to investors that are qualified as “experienced investors.”

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