How Qualified Client Rule Changes Affect Fund Managers

Law360, New York (April 5, 2012, 1:03 PM EDT) -- Registered investment advisers generally can charge "performance fees" only to qualified clients. If there is a performance fee, such as the typical carried interest, then investors in a fund managed by a registered adviser need to be qualified clients.

This issue is not a problem in C7 (qualified purchaser) funds, because qualified purchasers are qualified clients. However, a C1 (not more than 100 holders) fund may have investors that are not qualified clients.

Many fund managers have registered as investment advisers, or are in the process of registering as investment advisers.

The U.S. Securities and Exchange Commission has amended the qualified...

Stay ahead of the curve

In the legal profession, information is the key to success. You have to know what’s happening with clients, competitors, practice areas, and industries. Law360 provides the intelligence you need to remain an expert and beat the competition.

  • Access to case data within articles (numbers, filings, courts, nature of suit, and more.)
  • Access to attached documents such as briefs, petitions, complaints, decisions, motions, etc.
  • Create custom alerts for specific article and case topics and so much more!


Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Ask a question!