Gain access to privately held securities through private placement. The offerings span a wide range of required funding commitment and return opportunities.
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With this, investors are able to buy shares to a closed group of investors rather than through the open market.
In a private placement, a company sells shares of private placement stock or funds in the company in exchange for cash. This type of investment allows investors to purchase shares of entities, like hedge funds, oil and gas funds, and private stock that isn’t publicly traded or registered with the SEC.
Do your due diligence before investing in private placements as some are not regulated by the SEC. A financial professional can help with your review.
Reg D Funds
Oil & Gas Funds
Some private placements are regulated by a series of U.S. Securities and Exchange Commission rules known as Regulation D (Reg D). Under Reg D, companies can issue varying amounts of securities based on the type of investor the private placement is sold to—accredited or non-accredited investors—without registering those securities with the SEC.
Private stocks allow investors to invest in private companies rather than publicly traded ones. Buying shares in a private company is a bit more complicated of a process and all purchases must be approved by the issuing company.
Private equity refers to a class of investments and investors who invest in non-public entities, often in large dollar amounts. Private equity offers advantages to existing companies and start up companies as it allows them access to alternative liquidity options.
Angel funding is similar to private equity funds in the fact that it’s a class of investor. But where private equity investors put huge amounts of money into established businesses, angel investors specialize in early-stage businesses or start-ups. The fund is a pooled amount of money from “angel investors.”
Hedge funds are pooled investment funds that work to earn active returns for investors. Hedge fund investors must be “accredited investors” meaning they need to have a large net worth or are in good standing. These funds are similar to mutual funds and other funds, except they face less regulation and are often more expensive.
Often called Oil ETFs or Gas ETFs, these funds invest in companies that work in the oil and gas industry. They invest in things like options or futures associated with business activities. Many investors find the oil industry to be very attractive as it embodies a massive industry, but it’s known for being very complex and volatile.
Once you have determined that a private placement is suitable for you, it can be purchased with your Self-Directed IRA or another retirement account at Mainstar Trust. Click below to find out how to use a Mainstar Trust account to invest in a private placement.