Subject to a number of exceptions, fund managers that are SEC-registered investment advisers may not charge any type of performance fee or carried interest to their fund investors. 72 Rule 205-3 of the Investment Advisers Act of 1940, as amended (the “Advisers Act”), allows registered fund managers to charge such fees to “qualifi ed clients.”73 Rule 205-3 historically defi ned “qualifi ed clients” as clients with at least $750,000 in as- sets under management or a net worth of at least $150 million. Pursuant to Dodd-Frank, the SEC has recently adjusted these thresholds to $1 million and $2 million,.
