Hi Bryan, A sophisticated investor is someone who, under s.708...

Hi Bryan,

A sophisticated investor is someone who, under s.708 of the Corporations Act 2001 is considered a sophisticated and/or experienced investor, by virtue of:

- Net assets of +$2M
- Combined income of +$250k

Not difficult to achieve for many Australians. These clients typically apply for SI status with their accountant, who verifies their status and the client can then form a relationship with any of the various stockbrokers out there, e.g. Patersons, Hartleys, Morgans, etc

When a company needs to raise capital, it will typically put a memo out to its preferred brokers, who will bid for stock. Negotiations will occur to achieve an agreed price. Once the price and quantity is agreed, the winning broker/s will call their preferred clients and offer them a chance to participate. The broker themselves might also participate if they have a view on the stock. In the past, MRF have used CPS Capital to raise funds.

Hope that helps.