Insights

Pacific Premier Trust: Empower your PE Employees with Qualified Co-Investments

At private equity firms, employees help make success possible. In a competitive environment, they find the business opportunities, assess the risk, negotiate the deals, and oversee the portfolio of companies powering a firm’s returns. Under a Pacific Premier Trust Co-Investment Program, eligible employees have the option to participate in their firm’s investment opportunities using tax qualified accounts, which can build morale and team spirit; encouraging employees to stay with your company and creating more value over time. Employee Co-Investment programs allow private equity firms to potentially share their success with valued employees— including using tax-deferred accounts designed to build wealth in their retirement accounts.

How does a Co-Investment through a Pacific Premier Trust Self-Directed IRA work?

IRA accounts invested through Co-Investment vehicles invest alongside the private equity firm’s funds. These programs provide employees the opportunity to participate in the potential benefits of the funds their firm sponsors and manages as long as they are an eligible investor.

At Pacific Premier Trust, our streamlined operational efficiencies position us to support your firm with Co-Investment opportunities. Leveraging our expertise, we help ensure that your firm’s experience with us is seamless.

Why should you consider establishing a qualified Co-Investment program at your firm?

• Potential retirement wealth building opportunities. The ability for eligible employees to invest in or alongside employer sponsored and managed funds using qualified dollars, which can enable members of your team to participate in investments that may not otherwise be available in a tax-advantaged manner. This can provide your employees with an investment alternative as they seek to build wealth over time.
• Diversification. Co-Investment programs can provide your employees with a tool to assist in diversification of their retirement assets across a wider range of assets. While investments in employer sponsored and managed funds may be illiquid and at times volatile, they may also offer compelling benefits like non-correlation with public assets and higher return potential.
• Talent retention. A Co-Investment program may give your employees a personal stake in the funds your organization sponsors and manages, increasing their commitment to your organization and making it less likely they’ll leave your firm.
• A recruiting edge. Offering Co-Investment opportunities may help you attract the best potential employees for your business and set you apart from other firms that do not offer similar benefits.
• Alignment of interest. When your employees invest in the funds you manage, their interests become aligned with those of investors, increasing your firm's appeal to fund investors and potential investors.

What transactions are prohibited?

Although the self-directed IRA structure makes it possible to invest in a very broad spectrum of retirement assets, some transactions are prohibited. Understanding IRS Code 4975 is crucial, as it governs prohibited transactions in retirement accounts. Being well-versed in IRS Code 4975 helps maintain compliance, protect the tax-advantage status, and avoid negative impact to retirement savings. Employers and employees are encouraged to consult with their legal and tax advisors before making a decision to offer or invest in private equity funds through a Co-Investment program with retirement accounts.

Why should I consider Pacific Premier Trust?

Pacific Premier Trust has over 30 years of experience in custody services for private equity assets in tax qualified accounts, including nearly a decade partnering with certain private equity firms to help enable their employees to make Co-Investments through retirement accounts. Pacific Premier Trust provides streamlined processing specifically designed for Co-Investment programs with eligible employees investing through IRA accounts, including bulk processing capability for capital calls and valuation updates, online account management and dedicated administrative support. Pacific Premier Trust makes it easy for firms to onboard and administer a valuable option as part of its benefit programs that can help attract, motivate, and retain top quality talent. 

For more information, visit our Co-Investment Program, contact your Pacific Premier Trust advisor, or get in touch with our Co-Investment Team directly. 

About Pacific Premier Trust
Pacific Premier Trust, a division of Pacific Premier Bank, is a pioneer in helping investors’ utilization of retirement account funds for real estate, private equity, and other non-exchange traded assets. As the trusted directed-custodian of over $15 billion in assets across 35,000 client accounts, Pacific Premier Trust works with financial institutions, capital raisers, financial advisors, and self-directed investors who elect to leverage tax-advantaged retirement funds in alternative investments. We deliver flexible custodial solutions ensuring a seamless client experience and unparalleled access to private markets, supported by the strength of Pacific Premier Bank. Contact us to learn more.

Important information

Pacific Premier Trust performs the duties of an independent custodian of assets for self-directed individual and business retirement accounts and does not provide investment advice, sell investments or offer any tax or legal advice. Any communication made by Pacific Premier Trust with regard to opening or using a self-directed individual and business retirement account shall not be construed as a recommendation, call to action, or investment strategy to establish a particular account type. Clients or potential clients are in no way obligated to purchase services from Pacific Premier Trust and are free to purchase such services from any custodian they deem appropriate. Clients or potential clients are advised to perform their own due diligence in choosing any investment opportunity as well as consulting with a legal, tax and/or financial professional to assist them with an investment opportunity. Any information communicated by Pacific Premier Trust is for informational and educational purposes only. Alternative investments are not FDIC insured and are subject to risk, including loss of principal. Pacific Premier Trust is not affiliated with any financial professional, investment sponsor, or investment, tax or legal advisor.

This presentation may contain “forward-looking statements.”  Forward-looking statements may include information concerning future strategic objectives, business prospects, financial results, industry or market conditions or general economic conditions, among others. In addition, words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “forecasts,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Forward-looking statements are not guarantees, and they involve risks, uncertainties, and assumptions. Although such statements are based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from those expressed in the forward-looking statements. Pacific Premier Trust expressly disclaims any obligation to update any forward-looking statement in the event it later turns out to be inaccurate, whether as a result of new information, future events or otherwise.