SMSFs and Private Equity: A Match Made for Financial Independence

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Reach Alternative Investments
October 31, 2023
min read

SMSFs and Private Equity: A Match Made for Financial Independence

For the financially savvy Australians managing their own superannuation, the idea of diversifying into private equity may be an enticing one. The often superior returns and low correlation with traditional asset classes such as stocks and bonds make it an attractive proposition - but how does one navigate this complex landscape as a Self-Managed Super Fund (SMSF) owner? This article aligns SMSFs and private equity, dissecting their symbiotic relationship and how they can be combined towards financial independence.

What is Private Equity and Why Should SMSFs Consider It?

Private equity refers to capital investment made into companies that are not publicly listed. A private equity fund typically invests across a number of companies. As an alternative asset class, private equity can offer higher returns and diversification benefits. For SMSFs, this can mean a boost in potential earnings and a hedge against fluctuations in more traditional investments (past performance is not indicative of future performance).

How Can SMSFs Participate in Private Equity?

Diversifying an SMSF into private equity was once a notoriously complex process, available mostly to institutional investors. Today, however, reputed portals like Reach Alternative Investments are making it possible for wholesale investors to access some of the best global private equity funds. Reach Alts offer funds starting from as low as AU $15,000, thus opening up this exclusive asset class to wholesale investors in Australia.

What Advantages Does Reach Alternative Investments Offer?

Reach Alternative Investments focuses on selecting top-tier private market funds from leading global fund managers. Their team meticulously researches and curates these opportunities, creating an Australian-based legal structure for investors to access. With a comprehensive online portal, investors can view fund details, engage with the investment team, sign documents, and receive tax reporting all from one place. This offers ease, convenience, and transparent access to premium private equity opportunities.

What Risks Should SMSFs be Aware of When Considering Private Equity?

Like all investment avenues, private equity isn't without risk. Given the asset class is less liquid compared to listed securities, investors need to be prepared for longer-term commitments. Due diligence is key when considering private equity – understanding fund structures, manager track records, market dynamics, and regulatory frameworks. However, with diligence and the right guidance, SMSFs can effectively incorporate private equity into their investment strategy.

How Can Reach Alternative Investments Help Navigate These Risks?

Offering selected opportunities from the best global funds, Reach Alternative Investments continues to assist its investors in the prudent and responsible investment in private equity. Their hands-on service goes beyond providing a platform for investment. By offering research insights, monitoring investment performance and engaging in open communication with clients, they are paving the way for Australians to safely and responsibly access this high-performing asset class.

Are SMSFs and Private Equity Really a Match Made for Financial Independence?

When managed wisely and with the right guidance, a relationship between SMSFs and private equity can indeed lead to notable financial growth. The combination of the control provided by SMSFs and the potentially high returns from private equity can be a powerful strategy towards financial independence. It opens doors to an exclusive world of investing, previously accessible only to the institutional elite. With entities like Reach Alternative Investments, the pathway to financial independence via SMSFs and private equity is not just viable, but increasingly practical.

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