Investing in volatile markets presents numerous advantages and challenges. For Self-Managed Super Fund (SMSF) trustees, finding the right investment that balances risk and reward is critical. With rapid fluctuations in the markets, investors indeed need to remain informed about the best strategies for protecting their investments and ensuring growth. In this context, Private Equity (PE) has emerged as a powerful asset class that offers ample opportunities for SMSFs, especially during volatile markets. But, why exactly does private equity make sense for your SMSF in these times? Let’s find out.
Private equity investments involve taking positions in private companies not listed on stock exchanges, or in public companies with the goal of making them private. Through this process, investors aim to enhance the valuation of these companies and eventually selling them off for a substantial profit. Furthermore, Private equity funds are the most common investment instrument employed to access private equity investments.
1. Diversification: With private equity, SMSFs can introduce a significant degree of diversification into their portfolio, thereby reducing the overall investment risk.
2. High Returns: Private equity often offers higher returns compared to traditional investment options (although, past performance is not indicative of future performance). This could prove beneficial for SMSF trustees looking for greater returns to meet long-term financial objectives.
3. Reduced Volatility: Despite market fluctuations, private equity investments typically showcase relatively lesser volatility than publicly traded stocks (past performance is not indicative of future performance). A crucial reason for SMSFs to consider investing in private equity during unstable market conditions.
Access to private equity investing was traditionally reserved for institutions due to its inherent entry barriers such as high minimum investment levels. However, Reach Alternative Investments provides access to top-tier global private equity funds that cater specifically to wholesale clients, who are considered to be either sophisticated or professional investors.
Like any other form of investment, private equity too represents a set of unique risks, such as liquidity risk and economic risk. Yet, some of these risks can be managed effectively by investing with the right partners. A dedicated platform like Reach Alternative Investments opens the door for SMSFs to a prudently curated, select number of top-tier private market funds.
Through a single, dedicated investor portal, Reach Alternative Investments gives SMSFs access to the top-tier private equity funds from around the world. This allows SMSFs in Australia the opportunity to explore an array of diversified funds, review each fund's details, engage with the Reach investment team, and complete the investment procedure, all in one place.
Simply put, Reach Alternative Investments allows SMSFs to build an entire private market portfolio in an informed, controlled, and simplified environment. It provides an excellent opportunity for such investors to harness the potential of private equity, especially during volatile market conditions, and align their SMSF investment strategies towards their long-term financial goals.
In a volatile market, aligning your SMSF with private equity could prove to be a strategic move. With the right guidance from Reach Alternative Investments, SMSFs can access the best global private equity funds and create a robust and diverse investment portfolio capable of weathering market volatility and generating valuable returns for your financial future.