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Who Are These People?! "Sophisticated Investors"

Discussion in 'Beginner's Lounge' started by laurie, Nov 12, 2005.

  1. laurie

    laurie

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    I often see entitlements offered to so called "Sophisticated Investors" so who are these investors that get special treatment and how do you become one!

    cheers laurie
     
  2. Julia

    Julia In Memoriam

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    Re: Who Are These People!

    Hello laurie,

    My understanding is this refers to investors with over $1M to invest.
    Someone will correct me if that's not right.

    Julia
     
  3. tech/a

    tech/a No Ordinary Duck

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    Re: Who Are These People!

    Seems you can buy Sophistication Julia!

    Ive found that this is Advisor speak translated meaning.

    "I cant be bothered explaining the concept to you, if you dont understand the investment then this isnt for you."

    OR

    "I dont know how it works so rather than embarrass myself I'll have you believe this isnt for you."

    Can also mean HIGH RISK--best avoided.

    To become involved in Sophisticated Investments may I suggest wearing your best attire. I noticed a mass of sophisticated investors at the Melbourne Cup!

    But in all seriousness my view is that Sophisticated Investors are Investment savvy. They generally have a sound knowledge of the investments they are involved in.
    A specialist in Options or Property, share trading, futures trading etc would be seen as a sophisticated or well educated investor.
    I guess to become one of these people you would gain as much knowledge and then a track record in an investment field or fields.
     
  4. eddievanhalen

    eddievanhalen

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    Re: Who Are These People!

    "Sophisticated investor" is actually a fair dinkum term as defined under Corporations Law folks. ;)

    Chapter 6D - Sophisticated investor
    The Corporations Act requires that an offer of securities or debentures needs prospectus disclosure to investors unless excluded in section 708. Along with exclusions for small offerings, subsections 708(8) to 708(20) of the Corporations Act identify certain persons and circumstances as not requiring disclosure, including the following persons:

    a 'sophisticated investor;' which is defined where:
    the minimum amount payable for securities is at least $500,000; or
    the collective amount invested in the same class of securities adds up to $500,000; or
    a qualified accountant certifies the net asset worth of $2.5 million or gross income for each of the last two financial years of at least $250,000 per annum.

    The exemption for 'sophisticated investors' recognises that certain investors are able to protect their own investment interests without regulatory protection. In fact, both industry and such investors may discourage regulatory coverage and consider the imposition of any legislative disclosure to be an unwanted cost and burden



    Cheers,

    Ed
     
  5. Julia

    Julia In Memoriam

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    Re: Who Are These People!


    Thanks, Ed. It appears I overestimated the amount of dollars required, but nonetheless, had the essential meaning right.

    OK, Tech?


    Julia
     
  6. tech/a

    tech/a No Ordinary Duck

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    Fantastic.

    Love the band as well Eddie!
     
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