Use Your Retirement Funds to Invest in Privately-Held Entities
Private equity, also called private stock, PPMs, or private placements is an investment in privately-held entities that aren’t available to the public. An operating business, a real estate venture, or an investment partnership are just a few of the types of private equity offerings available.
These offerings are often limited partnerships, limited liability companies (LLC), and similar entities looking to accredited investors to raise the capital needed to grow their businesses.
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Your Self-Directed IRA Can Invest in:
A REIT is a real estate investment trust. This type of PE is where the retirement portfolio owns either private, or non-traded real estate holdings. Neither type of REIT is traded publicly, but non-traded REITs have to register with the SEC, while private REITS aren’t required to register.
Limited Liability Companies (LLCs)
LLCs are not generally subject to any state or federal taxes. So instead, the LLCs profits would flow through to the various owners of the LLC, and are then taxed as individuals on their own share of the LLCs taxable income.
A limited partnership is when individuals are invested in a business but are not directly involved in the day-to-day management. In a limited partnership, partners share equal responsibility for the business’s profits and losses, as well as the debts and liabilities.
This is a share in a private company that is not being traded on a public exchange. Private stock is primarily held by the company’s founder, venture capitalists, or private equity firms.
Privately Held Hedge Funds
Hedge funds offer investors the opportunity to pool funds with other investors. This allows a group of investors the chance to pursue investments with greater buying power.
More types of private equity include:
- Small businesses
- Equity crowdfunding
- Pooled investment funds
- Convertible notes
- Land trusts
Start Investing with a Self-Directed IRA in Private Equity
Establish and fund your own self-directed IRA.
Perform your due diligence on potential investment options before lending money or investing in a business. Speak with a qualified legal or investment advisor for more guidance on vetting an investment.
Direct your investments through Accuplan easily online on our user portal.
Rules for investing in Private Equity:
- Your IRA cannot buy into a private stock that you own
- You cannot invest in an S-Corp
- Any earnings made on private placement investing must stream back into the IRA directly
Learn about more self-directed IRA investing rules
How Do I Know if Private Equity Investing for me?
When it comes to private equity in a self-directed IRA, high risk can mean a high reward. Most often, those investing in private equity inside an IRA need to be willing to take a hands-off approach. You need to be a silent partner, or you put your IRA at risk of breaking IRS rules. If this unique strategy sounds intriguing, then private equity investing inside an IRA may be for you.