Definitions

Qualified Clients

 

Performance-based management fees may only be offered to “Qualified Clients" who are defined as:

 

  1. A natural person or a company that immediately after entering into the contract has at least $1,000,000 under management with the Adviser;

  2. A natural person or a company that the investment adviser entering into the contract (and any person acting on his behalf) reasonably believes, immediately prior to entering into the contract, either:

    • has a net worth (together, in the case of a natural person, with assets held jointly with a spouse) of more than $2,100,000 at the time the contract is entered into, exclusive of the value of their primary residence; or

    • is a "qualified purchaser" as defined in section 2(a)(51)(AA) of the Investment Company Act of 1940 (15U.S.C. 80a-2(51)(A)) at the time the contract is entered into; or

  3. A natural person who immediately prior to entering into the contract is:

    • an executive officer, director, trustee, general partner, or person serving in similar capacity of the investment adviser; or

    • an employee of the investment adviser (other than an employee performing solely clerical, secretarial, or administrative functions with regard to the investment adviser) who, in connection with his or her regular functions or duties, participates in the investment activities of such investment adviser, provided that such employee has been performing such functions and duties for or on behalf of the investment adviser, or substantially similar functions or duties for or on behalf of another company for at least twelve (12) months.

 

Accredited Investors

 

An "Accredited Investor" is defined in Rule 501 of Regulation D of the U.S. Securities and Exchange Commission (SEC) as: 

  • a bank, insurance company, registered investment company, business development company, or small business investment company;

  • an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment Adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;

  • a charitable organization, corporation, or partnership with assets exceeding $5 million;

  • a director, executive officer, or general partner of the company selling the securities;

  • a business in which all the equity owners are accredited investors;

  • a natural person who has individual net worth, or joint net worth with the person's spouse, that exceeds $1 million at the time of the purchase, or has assets under management of $1 million or above, excluding the value of the individual's primary residence;

  • a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or

  • a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchase is directed by a sophisticated person. 

 

Qualified Purchaser


A "Qualified Purchaser" means, under Section 2(a)(51) of the Investment Company Act means:

i.       any natural person (including any person who holds a joint, community property, or other similar shared ownership interest in an issuer that is excepted under section 3(c)(7) with that person's qualified purchaser spouse) who owns not less than $5,000,000 in investments, as defined by the Commission;

ii.      any company that owns not less than $5,000,000 in investments and that is owned directly or indirectly by two (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;

iii.      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

iv.       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.