Opportunities - Sophisticated investors
Sophisticated investor status: what it opens up
Many of the best priced opportunities, from placements to capital raisings, are offered only to sophisticated investors. Here is how to qualify, what it opens up and what stays exactly the same.
Companies and fund managers regularly raise capital through placements and other offers made only to sophisticated, or wholesale, investors. Through the Merit-Morgans Partnership, clients who qualify can take part in the offers the Investment Committee rates, which puts them in the best position when those opportunities arise.
The markers
- Net assets of at least $2.5 million. This can include your home and assets held through a company you control.
- Or gross income of $250,000 or more in each of the last two financial years.
- Either test is confirmed by a certificate from a qualified accountant, which is valid for two years.
- Separately, investing $500,000 or more in a single offer also qualifies for that offer.
What it opens up
- Placements and capital raisings from our preferred managers, often at their net asset backing.
- Pricing that is typically at a discount to the current market price.
- No transaction cost for taking part in a placement.
- Access to fixed income placements, listed investment trust raisings and select IPOs.
The purpose is not to take on more risk. It is to give you access to opportunities, and prices, that are usually unavailable through retail channels.
What changes, and what does not
Wholesale offers are made without a retail disclosure document, and the protection of the Australian Financial Complaints Authority (AFCA) does not apply to wholesale dealings. What does not change is the advice. All Merit advice follows full advice, Statement of Advice and compliance requirements, regardless of sophisticated investor status.
Every opportunity is discussed between Morgans and Merit before any decision, communication or trade takes place, and it is only put to you where it fits your strategy. You always decide.
Getting your certificate
If you think you meet either marker, your accountant can issue the certificate, and we are happy to coordinate it with them. Once it is on file, you are ready when the next opportunity comes.
How is your portfolio positioned?
Merit clients can talk through these themes at their next review. Call 1300 827 439 or email jim@meritfp.com.au.
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This information is general advice only. It has been prepared without taking into account your objectives, financial situation or needs, so before acting on it you should consider whether it is appropriate for you and speak with your adviser. Past performance is not a reliable indicator of future performance. Forecasts are estimates by third parties and may not be achieved. Views are those of the Merit-Morgans Partnership Investment Committee and are current at the date of publication. Merit Financial Services Pty Ltd is a Corporate Authorised Representative (No. 416822) of Paragem Pty Ltd, AFSL 297276. Unit 41/280 New Line Road, Dural NSW 2158. Research, dealing and administration are provided by Morgans Financial Limited, ABN 49 010 669 726, AFSL 235410. Financial Services Guide.