Investing Your IRA into Private Equity and Assets

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RELATED CONTENT

• Tax Considerations

• The PENSCO Marketplace®

• Pre-Investment Checklist

• Account Maintenance

Savvy investors realize that a private equity investment can deliver significant rewards. When those investments are held in a tax-advantaged IRA, the returns can be even more compelling.

At PENSCO, we know it can be challenging to locate and research private equity investments - that's why we created  The PENSCO Marketplace®. Here you will find a list of asset providers and equity crowdfunding platforms to consider as you look for your next investment.

• Private Equity Details

• A Private Equity Investor

Private Equity Details

What is Private Equity?

Private equity, sometimes referred to as a private placement, consists of ownership interest in companies that are not publicly traded on a stock exchange. These investments can be made in an operating business, a real estate venture or an investment partnership, among others.

Perhaps the best-known form of private equity investing is buying a stake in young, growing companies. Many of them turn initially to individuals, or “angel” investors, for funding to add people, equipment, technology, expertise and marketing.

There are two primary ways your self-directed IRA can invest in private equity:

• Through a fund. This may include Private Equity funds, Venture Capital (VC) funds and funds of funds.

• Directly in a company. This means putting money into private companies, including potentially, your current employer.

The investments available range from the safety of collaterally-secured loans to the high-risk, high-reward potential of angel investments in start-ups.

You can use your PENSCO self-directed IRA to purchase ownership in everything from micro-businesses to billion-dollar global companies, as well as less conventional opportunities, such as land trusts and hybrid securities. Available investments include:

• Limited liability companies (LLC) and limited partnerships (LP)

• Private common stock, preferred stock, options, rights and warrants

• Private hedge funds and funds of funds

• Private and non-exchange traded Real Estate Investment Trusts (REITs)

• Foreign private equity

• Exchange traded funds or funds of funds investing in privately-held companies

• Convertible notes

 

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