How SMSFs Can Access Australian Private Equity Markets

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Reach Alternative Investments
October 31, 2023
min read

If you're a self-managed super fund (SMSF) trustee, it's crucial to understand that diversification extends beyond traditional asset classes. In recent years, alternative investments, particularly private equity, have gained significant recognition as a hedge against market volatility and a promising source of returns. Despite this, access to private equity markets, especially for SMSFs, has largely remained somewhat elusive. Let's unravel how SMSFs can tap into the full potential of Australian private equity markets.

What is Private Equity and its Importance?

Private equity refers to investments in companies not listed on a public exchange. They are characterised by high-risk, high-reward opportunities and demand patient capital due to their longer investment horizon. They often involve the transformation of a holding through strategic improvements, collaborations and efficiencies. The main attraction is their robust potential returns, posting more than double the returns of public equities over the past two decades (past performance is not indicative of future performance).

Why Should SMSFs Consider Private Equity?

Diversification is a key investment strategy for wealth accumulation and risk management. Traditional assets like public equities, bonds and cash have their place in a diversified portfolio. However, adding top-tier private equity may help reach the risk-return efficient frontier, thereby enhancing portfolio returns while reducing risk through uncorrelated returns (past performance is not indicative of future performance).

Are Private Equity Investments Suitable for SMSFs?

Private equity funds are growing in popularity. However, they typically require deep-dive due diligence, significant minimum investment, and a longer-term perspective. However, with Reach Alternative Investments, the barriers of entry are significantly lowered for wholesale investors, allowing SMSFs to access top-tier private market funds from around the world, even with as little as AU $15,000.

How Can SMSFs Access Private Equity Through Reach Alternative Investments?

Reach Alternative Investments prides itself in making private market investments easier, more efficient, and more transparent for wholesale investors. It undertakes rigorous research to select elite private market funds from the world's leading fund managers. It then creates a legal structure in Australia to offer these opportunities to investors. Investors can view details of each fund, engage with the investment team, sign all documents, and receive tax reporting, all in one place. Essentially, SMSFs can build an entire private market portfolio through Reach Alternative Investments.

Conclusion: Shaping the Future of Australian Private Equity Access

The journey to democratise access to private equity markets in Australia has gained remarkable pace. Reach Alternative Investments is at the forefront of this transition, opening avenues for SMSFs to gain exposure to high-return asset class. It presents an exciting opportunity for SMSF managers to add value to their portfolios, aligning investment outcomes with member objectives and future necessities.

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