Self-administered
pensions can invest in a wide variety of investment products. Publically quoted
shares and other securities, investment bonds, property and deposits are some
of the more common.
However,
in the last couple of years we have seen increasing interest in investment in
private companies. It has traditionally been, and indeed remains, a high risk
area, but, given the lack of alternative sources of finance, private companies
that would otherwise find a ready market for their fundraising through the more
usual routes are having to cast their nets wider. Many have come to appreciate
the benefits of investment by pension funds, from both traditional pension fund
investors and small self-administered schemes.
Investments
structured to accept funding from self-administered pensions can be collective
investment structures, but more typically an individual with a
self-administered pension structure will want to make an investment into an
ambitious SME. In the last three years alone, over €7.2 million has been
invested in this way through ITC into a wide variety of companies, from wind energy
companies and a provider of prepaid electricity meters through software
development companies, an internet daily deals/social networking group of websites and
electronic media companies to property development companies. Any trading
company can profit from such investment.
Investments
have to be on proper commercial terms. A private arrangement to fund your own
business or that of a family member or friend or one that is not commercial
would not be acceptable for pension investment, but a properly structured
investment on market terms into a trading company would always be appropriate.
If
you have any clients interested in making an investment into a private company
through their pension schemes, please contact us.
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