The self-managed super fund (SMSF) sector continues to grow in popularity among Australians desiring more control over their retirement savings. However, with this increase in control usually comes an increased responsibility to diversify investments and, potentially, look beyond traditional asset classes. One such asset class is private equity, a powerful instrument known for delivering strong returns over the long term (past performance is not indicative of future performance). Reach Alternative Investments offers an advantageous opportunity to invest a portion of your SMSF in top-tier private equity funds, thus helping diversify your investment portfolio.
Private equity refers to an asset class consisting of equity securities in companies that are not publicly traded. Essentially, private equity firms pool funds from various sources, including SMSFs, and use these funds to acquire a substantial interest in companies. These companies are then either developed and later resold at a profit or utilised to generate regular income for the investors.
The primary allure of private equity lies in its potential to produce returns that exceed those of standard equity markets. With interest rates at record lows and an uncertain outlook for many traditional asset classes, diversification into private equity can help to enhance overall portfolio returns and reduce risk.
Most forms of private equity investments typically are restricted to 'wholesale clients', defined as 'sophisticated' or 'professional' investors. Thanks to Reach Alternative Investments, these investors can access our curated selection of the world's leading funds with an investment as low as AU $15,000.
Getting started with private equity investment can initially seem daunting due to its complexity and exclusivity. Here at Reach Alternative Investments, we research top-tier private market funds throughout the year and provide a handpicked selection to our clients on our online platform.
Our experienced team also manages the legal structuring within Australia, allowing you to view, engage, and decide on investment opportunities within the portal. From making an informed investment decision to signing documents and receiving tax reporting - we simplify the process of private market investment.
When considering private equity as part of your SMSF, it is crucial to ensure that it aligns with your fund's investment strategy. Such a strategy should consider the members' risk tolerance, liquidity needs, return objectives, and the fund's ability to meet its current and future obligations. Reach Alternative Investments offers its expert guidance to navigate through the complexities involved in this process.
Like any asset class, private equity comes with its set of risks. It involves investing in unlisted companies, which means there is a lack of liquidity compared to publicly-listed stocks. Additionally, the results are highly dependent on the performance of the management teams in place.
It is essential that you thoroughly scrutinise these factors when selecting funds.
Investing a portion of your SMSF in private equity may prove beneficial for your overall investment strategy given the robust potential returns. The team at Reach Alternative Investments is committed to presenting world-class private market funds and helping you navigate this asset class responsibly. Remember, diversifying your investments can potentially lead to higher returns for a more comfortable retirement (past performance is not indicative of future performance).