Key takeaways:
- Accredited and eligible investors can access private investments that aren’t available to the general public.
- Compared to eligible investors, accredited investors must meet higher income thresholds.
- The criteria for accredited and eligible investors in Canada are outlined under National Instrument 45-106.
- No official accredited investor status verification is required when purchasing a private investment.
- Skyline offers institutional quality investment opportunities to both accredited and eligible investors.
The private investment space in Canada is a dynamic market which can offer attractive and rewarding opportunities. But unlike the public markets, access to these private investments is generally more limited. You may have heard terms like “accredited investor” or “eligible investor”—but what do they actually mean, and why do they matter?
Participation in most private offerings within Canada’s exempt market is governed by eligibility criteria established by Canadian regulators. These rules define the investment products you can access, how much you can invest, and the disclosures you’re entitled to, helping ensure investors are well-suited for these opportunities.
Whether you are seeking alternative investments for accredited investors or simply want to understand which investor category you qualify for, this guide is designed to help you assess your investor classification and how it relates to accessing private alternative investments.
What is the exempt market?
In Canada, the exempt market (EM) provides access to private investment opportunities offered outside the traditional prospectus system. These include real estate funds, private equity, venture capital, and other alternatives that can help investors diversify beyond stocks, bonds, and cash.
How does an investor meet accredited investor eligibility in Canada?
For those who qualify, the benefits of being an accredited investor means access to private investments that are not available to the general public. In simple terms, an accredited investor is an entity or individual that meets certain income or asset requirements set by regulators, which allows them to invest in opportunities outside the stock market. These opportunities include private equity and real estate funds, offering access to higher-return and diversified strategies that differ from public markets. The Canadian Securities Administrators (CSA), under National Instrument 45-106 (NI 45-106), define accredited investors as individuals or entities who meet any one of the following criteria:
- Income Test: Earned more than $200,000 in each of the last two years (or $300,000 combined with a spouse) and reasonably expects to maintain that level in the current year.
- Financial Asset Test: Holds more than $1,000,000 in financial assets (cash and securities), net of liabilities.
- Net Asset Test: Has net assets of at least $5,000,000 (alone or with a spouse).
- Professional Registration Test: Is registered in Canada as a dealer or adviser.
Accredited status also applies to certain entities:
- Corporations, trusts, or partnerships with net assets of at least $5,000,000.
- Entities controlled by accredited investors, where ownership refers to voting or management control.
While rules are set nationally, they are enforced at the provincial level, meaning there may be minor administrative variations but the core criteria remain the same across Canada.
Please note, this is not an exhaustive list—additional thresholds for accreditation exist under NI 45-106 and may apply to both individuals and entities.
What are eligible investor qualifications in Canada?
In Canada, an eligible investor is defined under NI 45-106. Eligible investors rank just below accredited investors on the investor ladder, giving them access to many exempt market opportunities—but with lower financial thresholds. This makes the exempt market more accessible while still ensuring investors meet certain safeguards.
You may qualify as an eligible investor if you meet any one of the following criteria:
- Net income before taxes exceeded $75,000 in each of the two most recent calendar years, with reasonable expectations to exceed that income level in the current year.
- Have a combined net income before taxes with a spouse exceeding $125,000 in each of the two most recent calendar years, with reasonable expectations to exceed that income level in the current year.
- Individually, or together with a spouse, have at least $400,000 in net assets.
- Have obtained investment suitability advice from a registered investment dealer, exempt market dealer, or portfolio manager confirming the investment is appropriate for you.
Eligible investor status may extend to corporations, trusts, or partnerships controlled by an individual investor if they are majority-owned, controlled, or directed by individuals who are themselves eligible investors.
| Accredited Investor | Eligible Investor | |
|---|---|---|
| Qualification | Meets specified income/net worth thresholds | Meets specified income/net worth or other criteria |
| Type of investment | Can invest in any exempt market offering | Can invest in exempt market offerings using the OM exemption |
| Investment maximums (per year) | No limit | $30,000 or up to $100,000 with suitability advice from a registered dealer |
| Documentation requirements | Subscription agreement and accredited investor certificate | Offering Memorandum and risk acknowledgement |
Offering Memorandum requirement for eligible investors
If you’re investing as an eligible investor, securities regulators require you to receive and review an Offering Memorandum (OM) for the private investment you’re considering. Think of the OM as a detailed guidebook: it explains the investment, outlines potential risks, fees, and redemption policies, and provides financial statements so you have a full picture before investing.
For accredited investors, an OM is not required by regulators. However, some issuers may still choose to provide one to promote transparency. In those cases, the OM acts as a disclosure document and legal record but is not a contract and does not guarantee future results.
Why accredited and eligible investors choose private alternative investments like Skyline
In today’s environment, both accredited and eligible investors are showing strong demand for private real estate investment trusts (REITs) and clean energy funds. These private opportunities allow investors to diversify beyond public markets while aiming for stable income and enhanced returns. By offering benefits that traditional public market investments often cannot, private investments can fill the gap by offering:
- Steady compounding income and appreciation over long-term time horizons
- Performance is anchored in tangible fundamentals, like real estate assets and essential infrastructure, helping stabilize portfolios and reduce public market volatility.
- Portfolio resilience through hard-asset backing while benefiting from megatrends like decarbonization, electrification, and population growth.
If you’re an accredited or eligible investor looking to explore the exempt market—or want clarity on your eligibility status, private alternative investments like Skyline’s four offerings can provide you a practical way to diversify your portfolio. With access to tangible, future-focused assets, these investments can help you to reach your long-term goals.
Ready to get started? Discover which Skyline investment opportunity aligns with your investment status and goals:
