Private Placements 

More than ever, investors are looking to place alternatives within their tax-advantaged retirement  portfolios. Midland Trust is meeting that demand by helping investors capitlize on opportunities quickly with our robust experience and simplified approach.

 

HEDGE FUNDS

PRIVATE EQUITY FUNDS

VENTURE CAPITAL FUNDS

REAL ESTATE SYNDICATIONS

Who Can Invest in Private Equity With a Self Directed IRA?

Typically, these alternative assets are limited to accredited and institutional investors. Accredited investors are those proven to be financially fit to invest large amounts of funds over a long time without sustaining a substantial hardship if the asset is fruitless. These funds may include investing in startup businesses, developing technology, gaining capital to improve an existing entity’s viability, and even acquiring an existing business.

Accredited Investor 2020 Changes

Common Pooled Investment Structures

Limited Partnerships (LP)
Limited Liability Corporations (LLC)
C-Corporations 
Special Purpose Vehicles (SPV)
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PURCHASE

If you’re looking to take advantage of investing in private equity using funds from your IRA,

get in touch with one of our private equity specialists today.

 

Call us at 239-333-4924 Choose a time for us to call you

Questions from the field

Two major differences are in the way you take title and the flow of money in and out of the investment vehicle. When an IRA invests, the investment is always titled to the IRA using the IRA’s tax ID. And all income and expenses flow through the IRA account rather than through the investor personally.

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How is this process different than if I make the investment outside of an IRA?

No. Midland is not a fiduciary and does not make investment advice. You bring the investment option to us, and we administer it per the IRS guidelines for retirement accounts.

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Does Midland provide a list of private investments I can invest into?

The IRA is a separate entity from that of the account holder. When an IRA invests, the investment is always titled to the IRA using the IRA’s tax ID.

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How are the IRA investments titled?

Midland will send and receive any funds between the IRA and the investment. We will also request a Fair Market Value (FMV) update annually .

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What is Midland’s/Custodian’s role after funding the investment?

Traditional brokers do not have systems in place to accommodate alternative investments.

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Why doesn’t my current IRA company allow me to invest into private offerings?

Investing with an IRA is quite flexible. Depending on the investment, it may be structured in many ways, including private stock, LLC interests, and debt instruments like promissory notes. Always refer to your professional and legal advisers to decide which structure is best for your investment. IRAs can invest in C-Corporations, LLCs, LPs and many other types of private offerings.

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How can my account be used to invest in a private business?
CASE STUDY

SMALL INVESTMENT IN PRIVATE BANK STOCK OFFERS HUGE RETURN

Charles, a retired school principal who currently lives in Southwest Florida, has had success with a small investment in private bank stock. By taking advantage of the  opportunity ...

 

READ THE CASE STUDY
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Investing in Private Equity With a Self Directed Retirement Plan

Private equity is a unique investment that can fit well in a self-directed IRA. It is important to note that these types of closed investments are usually only open to Accredited Investors. Private equity can invest in a wide array of options including, closed business stock, venture capital, or a pooled investment vehicle like an LLC, LP, or hedge fund. Inside each company, they may be investing in real estate, private lending, or purchasing companies. Because of each deal’s complexity, it is essential to discuss these investments’ pros and cons with your financial or tax advisor.


Who Can Invest in Private Equity With a Self Directed IRA?

Typically, these alternative assets are limited to accredited and institutional investors. Accredited investors are those proven to be financially fit to invest large amounts of funds over a long time without sustaining a substantial hardship if the asset is fruitless. These funds may include investing in startup businesses, developing technology, gaining capital to improve an existing entity’s viability, and even acquiring an existing business.

Accredited investors can use their self directed IRAs and other retirement plans to invest in a private stock. This strategy allows investors to build tax-sheltered income in their accounts. Midland works closely with clients investing in private equity to facilitate the purchase in compliance with current rules and regulations. Our ability to do this maintains the account’s tax-advantaged status. It enables our clients the precious time to identify holdings they believe will increase their potential for building retirement wealth.
A self directed retirement plan can invest in most private offerings. These offerings include private equity/private stock. When investing in private equity with a retirement account, the dividends and gains from investments are paid directly to the retirement account. These dividends are either tax-deferred (Traditional IRAs) or tax-free (Roth IRAs). There can be capital calls with these types of investments, so please understand the investment and how it affects your IRA.

Investing in private equity within an IRA has been an option since 1974. However, the vast majority of investors are not aware of this option. Traditional retirement account custodians limit investments to Wall Street stocks, bonds, and mutual funds. Midland allows investors to choose alternative assets such as real estate and private equity investments to build their wealth.