Private equity investments have always been seen as the exclusive domain of institutional investors and high-net-worth individuals. However, Australians managing their own Self-Managed Super Funds (SMSFs) are perfectly positioned to take advantage of this attractive asset class. Despite being seen as complex and risky, private equity offers potential for higher returns, diversification and access to unique investment opportunities.
Private equity refers to investments in private companies or buyouts of public companies that result in the company being delisted from public exchange. It holds the promise of higher returns than traditional investments (although, past performance is not indicative of future performance). When underpinned by robust research and prudent selection, private equity investments offer the chance of substantial capital growth, which can significantly boost the performance of your SMSF.
SMSFs offer a level of control over your superannuation that other super funds cannot replicate. SMSF trustees have the flexibility to select a broad range of investments, including private equity. SMSFs also typically have a longer investment time horizon than individaul investors, allowing them to benefit from the longer-term nature of private equity investments, which often take several years to yield results.
Like any investment, private equity is not without its risks. It’s less liquid than public equities, which can be sold immediately if necessary. Additionally, the intricacies of company-specific issues and market dynamics can pose challenges. However, some risks can be mitigated, particularly through the use of a knowledgeable investment portal like Reach Alternative Investments.
Reach Alternative Investments provides access to 'wholesale clients', being 'sophisticated' or 'professional' investors in Australia to top-tier private market funds from the world’s leading fund managers. We research, curate and provide the legal structure to offer these opportunities in a simple, secure and interactive online investor portal.
Our expert team at Reach Alternative Investments conducts robust research and maintains strict quality control over the funds offered to our clients. We also provide extensive fund details, in-depth research and the opportunity to interact with our investment team. All these measures help reduce the risks and increase the potential benefits of investing in private equity through your SMSF.
Investing in private equity via your SMSF offers potential for robust capital growth and an additional layer of diversification. Although it carries risks, these can be managed with diligence, knowledge, and the right team on your side. It’s for investors to consider whether the unique opportunities and potential rewards of private equity align with their SMSF's investment strategy and risk tolerance.
