Coming soon: Private Markets SIPP
Our new Private Markets SIPP (Self-Invested Personal Pension) is coming soon, before the end of the tax year.
It gives eligible investors the opportunity to invest their pension in a broad range of Private Equity and Private Markets funds whilst also benefitting from the valuable tax advantages of a pension. It is the first pension of its kind in the UK.
- Get exposure to Private Markets – You can invest in Private Markets funds run by some of the world’s largest and best respected managers from just £10,000.
- No capital gains tax on any growth – Because you invest through a SIPP – a type of pension – your investment can grow free of capital gains tax.
- Benefit from up to 45% income tax relief on contributions – If you can and do make a new contribution, you could benefit from up to 45% pension tax relief, meaning a £10,000 investment could cost as little as £5,500. Note: detailed conditions apply.
You can also transfer funds from your existing pensions, so you don’t have to invest any new money.
Tax rules can change and benefits depend on circumstances. You can only access pensions from age 55 (57 from April 2028). You need to ensure you are eligible to make contributions and that you won’t lose valuable benefits/guarantees or incur excessive fees before transferring.
Important: The information on this website is for experienced investors. It is not a personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value: you could lose all the money you invest.
Why consider investing in Private Equity or Private Markets in general?
Nowadays, if you just invest in public listed companies, you risk missing out on a large slice of the market, and arguably one of the most exciting.
An IPO – an initial public offering or stock market floatation – is no longer the ultimate milestone of success.
Today’s high-growth companies are staying private for much longer, delaying or entirely avoiding an IPO. In fact, just 19,000 of the world’s 159,000 companies with over $100 million revenue are listed. The rest are private, often with no immediate plans to list.
So, if you just invest in listed shares or funds, you risk missing out on all these opportunities.
Public vs. Private: US companies with revenue of more than $100 million
Source: J.P. Morgan Asset Management
Implications for investor portfolios
This asymmetric distribution of opportunities has concrete, tangible implications for investor portfolios.
Over the past 25 years, $10,000 in Private Equity would have delivered over $130,000 more than the same amount invested in global equities, outperforming on average by 6.2% a year net of fees. Though, of course, past performance is not a guide to the future.
25-year cumulative returns for $10,000 invested
Source: Hamilton Lane and Morningstar, to December 2024. Compares cumulative performance of Developed Market Buyout Private Equity versus IA Global Sector. Returns are in USD and net of management fees. Returns for UK investors will be affected by currency fluctuations. Past performance is not a guide to the future.
So, perhaps unsurprisingly, for the past few decades, some of the world’s largest investors – pension funds, institutions, sovereign wealth funds and the ultra-wealthy – have been allocating in the region of 20% to 30% of their portfolio to Private Equity and other Private Markets investments.
So far, private investors have largely been unable to do so.
But this is finally changing. Now, not only can you get exposure to Private Markets from a relatively small investment of £10,000, you can also combine that with the valuable tax breaks of a pension.
Should you consider an allocation to Private Markets?
If you are experienced and are comfortable with the risks, it could be worth looking into Private Markets investments to form your own view, rather than missing out on this asset class and its potential altogether.
As with any investment, returns are not guaranteed: your investments can go up as well down in value. In addition, Private Equity investments are more risky and illiquid than listed shares and funds: they often use more complex strategies and can be harder to price and value. What’s more, there are restrictions around redemptions and you should think of these as long-term investments.
This is why even just to be able to see the details of the funds on our website we ask you to confirm you are a high net worth or sophisticated investor. To invest, you will need to become an Elective Professional Client of Wealth Club and answer a few more questions about your investment experience. Elective Professional Clients give up certain investor protections.
For the right type of investor, accessing Private Markets could now be more straightforward and convenient, offering an experience comparable to more mainstream investments.
The ability to invest through a SIPP – either by making a tax-efficient contribution or by transferring funds from existing pension – could make the opportunity more attractive still. You will need to form your own view.
Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy, sell or hold any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.
Alex Davies
Chief Executive
Alex was a board director at Hargreaves Lansdown, where he worked for 15 years. He was responsible for building Hargreaves Lansdown into the biggest direct-to-consumer SIPP provider in the UK with more than 150,000 clients and over £12 billion under management. He is a keen investor with a portfolio of shares, funds, student property, EIS and VCT investments.