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A Texas-based private equity firm is broadening the variety of ways that investors can tap into U.S.-based energy projects.
American Energy Fund announced this month that it had expanded its asset-backed investment offerings for domestic oil and gas projects.
The firm said the new options give accredited investors the ability to invest in energy sector projects that are traditionally more exclusive. Projects involved in the firm’s initiative include a Permian Basin Joint Venture and a North Texas Drilling Program, which would offer on-site investor briefings and operational transparency, according to AEF.
“With continued volatility in traditional markets, more investors are revisiting energy as a viable asset class,” a company spokesperson said. “Our focus is on delivering consistent performance, operational visibility, and regulatory compliance across all investment opportunities.”
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American Energy Fund’s new investments (Mario Tama/Getty Images)
The firm’s offerings aren’t available to the general public and are limited to what are known as “accredited investors.” They are not casual investors but rather those typically with deeper pockets.
Financial industry regulators define “accredited investors” as individuals or businesses who meet certain thresholds, so they have the financial resources to be considered sophisticated investors who are capable of assessing investment opportunities that aren’t normally available to the general public.
The Securities and Exchange Commission defines accredited investors as those who meet any of the specified wealth, income or financial sophistication criteria.
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AEF’s investments tap into oil projects in the Permian Basin and North Texas. (Getty Images)
Investors with net worth above $1 million, excluding their primary residence, either individually or with a spouse or partner, satisfy the financial criteria.
They can also qualify if they have income over $200,000 as individuals or $300,000 with a spouse or partner in each of the two prior years and have a reasonable expectation of the same for the current year.
Professional criteria include investment professionals in good standing with Series 7, Series 65 or Series 82 licenses. Additionally, directors of the company selling the securities, or family clients of a family office who satisfy the threshold requirements for entities, are also eligible.
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Entities can qualify as accredited investors if they own more than $5 million in investments or assets, or if all their owners qualify as accredited investors individually.
