What is a Wholesale Investor?

In Australia, certain investment products are exclusively available to wholesale investors. These investors are generally more experienced in financial products and do not require the regulatory protections provided to retail investors. Wholesale investors have a good understanding of the risks involved and the specific characteristics of the fund or financial security they are investing in.

To approve applications into the Waterhouse VC Fund, the investor must meet the wholesale investor criteria.

Do You Qualify as a Wholesale Investor?

Under the Corporations Act 2001, a person can be considered a wholesale investor if they meet one of the following tests:

Product Value Test

If the initial investment amount in the fund is A$500,000 or greater, the person is considered a wholesale investor, even if their interest subsequently falls below A$500,000.

For investments less than A$500,000, the following tests will apply:

Personal Wealth Test

An investor is classified as “wholesale” if they have net assets of at least A$2.5 million or a gross income of at least A$250,000 for each of the last two financial years. A certificate from a qualified accountant, dated no longer than 2 years ago, must be provided with the fund application.

Professional Investor Test

The Waterhouse VC Fund can be made available to a ‘professional investor,’ which includes:

a) An Australian financial services licensee;

b) A body regulated by APRA outside of superannuation;

c) A body registered under the Financial Corporations Act 1974;

d) Trustees of superannuation funds, approved deposit funds, pooled superannuation trusts, and public sector superannuation schemes under the Superannuation Industry (Supervision) Act 1993, with net assets of at least A$10 million;

e) A person who controls at least A$10 million.

Passing any of the above tests will qualify you as a wholesale investor. Even if you meet these criteria, it is essential to ensure you fully understand all the details and risks associated with the financial investment product before making any investments.