Why Private Equity is a Good Fit for SMSFs in Australia

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Reach Alternative Investments
November 2, 2023
min read

Why Private Equity is a Good Fit for SMSFs in Australia

As the investment landscape evolves, a growing number of Self-Managed Superannuation Funds (SMSFs) are exploring new strategies to fuel their growth, and one asset class that is capturing their interest is Private Equity. Let's delve into why this often overlooked sector can be an attractive option for SMSFs in Australia.

What is Private Equity?

Private equity refers to an alternative investment class consisting of capital not listed on a public exchange. It involves capital investments made into private companies or conduct buyouts of public companies that result in a delisting of public equity. Generally, these are long-term investments that offer potential for significant returns.

Why is Private Equity Attracting SMSFs?

Private equity investments can provide SMSFs with diversification, which is key to reducing risk in an investment portfolio. With the ability to invest in a variety of companies across sectors and geographies, SMSFs can gain exposure to a wide array of business models, protecting them from industry-specific downturns and geographical instability.

How can SMSFs access Private Equity?

Historically, opportunities to invest in private equity funds have been limited to institutional investors due to their complexity and the significant initial capital required. However, investment portals like Reach Alternative Investments are changing this landscape, providing SMSF trustees with the ability to participate in this exclusive asset class from as little as AU $15,000 into a fund.

What Returns Can SMSFs Expect from Private Equity?

With the appropriate risk management, private equity has the potential to deliver higher returns than traditional equity markets. It gives SMFS investors the opportunity to invest directly into private companies poised for explosive growth, which can result in substantial returns upon a successful exit via sale or Initial Public Offering (IPO).

Is Private Equity a Prudent Choice for SMSFs?

Investing in private equity does include risks given the illiquid and long-term nature of these investments. However, with the right advice and guidance, SMSFs can successfully navigate these risks. For many SMSFs, the long investment horizon is not an issue. Reach Alternative Investments is committed to a prudent and responsible approach to investing in this asset class, providing comprehensive research, curated opportunities, and legal structures in Australia, making investing in private equity easier, more transparent, and better for SMSFs.

How Does Investing in Private Equity via Reach Alternative Investments Work?

At Reach Alternative Investments, we curate excellent private market funds from the world’s top fund managers. Our investor portal will provide all the essential information regarding each fund. You can study them, interact with our investment team, decide your investment, and handle all documentation and tax reporting. In essence, you can build your entire private equity market portfolio from the comfort of your home through our portal. Our low minimums allow you to further diversify across the private equity spectrum.

In conclusion, private equity has opened up a new avenue for SMSFs in Australia. The potential for significant returns and diversification it offers, coupled with the growing accessibility provided by portals like Reach Alternative Investments, makes it an option well worth considering for your portfolio.

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