What Are private equity funds in a self-directed IRA?

A self-directed IRA may hold interests in certain professionally managed private equity funds. These funds generally pool capital to acquire ownership interests in privately held companies or other assets that are not publicly traded.

Private equity fund interests held within a self-directed IRA must comply with applicable IRS rules and the fund's eligibility and documentation requirements.

Understanding Private Equity Funds

Private equity funds are generally managed by a fund manager or general partner who makes decisions regarding the fund's assets and operations.

When considering a private equity fund, account owners should review:

Fund Structure: The legal structure, management, and ownership terms.
Offering Documents: The private placement memorandum (PPM), subscription agreement, and other applicable documents.
Eligibility Requirements: Any accreditation, minimum purchase amount, or other participation requirements.
Fees & Distributions: The fund's fees, expenses, distribution provisions, and other financial obligations.
IRS Requirements: Applicable prohibited transaction rules and potential tax considerations, including Unrelated Business Taxable Income (UBTI).

Account owners are responsible for selecting funds, reviewing documentation, and conducting their own due diligence.

How Private Equity Fund Interests Are Purchased With Your Self-Directed IRA

Mountain West IRA provides administrative and recordkeeping services and does not select, recommend, research, evaluate, or perform due diligence on private equity funds or their underlying assets.Mountain West IRA does not select, recommend, research, evaluate, or perform due diligence on assets.
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Research the Fund: Review the private equity fund, offering documents, ownership structure, eligibility requirements, subscription terms, fees, and potential risks. Conduct your own due diligence.
Complete & Submit Purchase Instructions: Complete and sign the applicable Mountain West IRA Purchase Kit and review the fund's subscription agreement and supporting documents. Mark applicable documents "Read and Approved" with your signature and date before submitting them to Mountain West IRA. The subscription documents must identify your IRA as the investor. Do not sign where the investor's signature is required, as Mountain West IRA signs on behalf of the IRA.
Transactions Department
Phone: 208-510-0859
Email: transactions@mwira.com
Administrative Review & Authorization: Mountain West IRA reviews the submitted documentation for administrative requirements and coordinates any necessary corrections or additional information. Once requirements are satisfied, an authorized signer executes applicable documents on behalf of the IRA.
Fund the Purchase: Submit all required, complete, and correct documentation at least three business days before the requested funding date. Once administrative requirements are satisfied and sufficient IRA funds are available, Mountain West IRA processes the authorized transaction at the account owner's direction.
Maintain Your Asset: Distributions and other proceeds attributable to the IRA-owned fund interest must be deposited directly into the self-directed IRA. Eligible asset-related expenses must be paid from IRA funds, and applicable ownership records must be maintained.

Getting Started With Your Self-Directed IRA

Follow the steps below to establish and fund your self-directed IRA, submit asset purchase instructions, and understand ongoing account requirements.

Complete Your Starter Kit. Select the appropriate account application below. To request electronic signature documents, email accounts@mwira.com or call 208-314-2580.

Traditional IRA Starter Kit

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Roth IRA Starter Kit

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SEP Starter Kit

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Individual 401(k) Plan Starter Kit

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SIMPLE IRA Starter Kit

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Health Savings Account (HSA) Starter Kit

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Traditional IRA Starter Kit

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Roth IRA Starter Kit

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SEP Starter Kit

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SIMPLE IRA Starter Kit

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Precious Metals Foreign Currency Starter Kit

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Individual 401(k) Plan Starter Kit

PDF Download

Health Savings Account (HSA) Starter Kit

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Fund Your Account. Fund your account through an eligible transfer, rollover, or contribution, depending on the account type and your circumstances.

Submit Your Purchase Instructions. Complete the appropriate transaction forms and provide any required supporting documentation to Mountain West IRA for administrative review.

Maintain Your Asset. Any income or proceeds generated by IRA-owned assets must be deposited into the IRA, and eligible asset-related expenses must be paid from IRA funds. Mountain West IRA provides ongoing administrative and recordkeeping services and processes authorized transactions at the direction of the account owner.

Understanding Private Equity Fund Commitments in a Self-Directed IRA

Private equity funds may require an initial contribution and additional funding through capital calls. Explore our Private Equity Funds IRA Guide to learn about subscription requirements, capital calls, funding procedures, and account owner responsibilities when holding these assets in a self-directed IRA.

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Key Considerations for Private Equity Funds in a Self-Directed IRA

Liquidity: Private equity fund interests may have limited liquidity, lengthy holding periods, and restrictions on transfers or withdrawals.
Eligibility: Certain funds require participants to meet accredited investor or other eligibility requirements.
Capital Calls: Some funds require additional contributions after the initial purchase. Account owners are responsible for ensuring sufficient IRA funds are available to meet these obligations.
Tax Considerations: Certain fund activities, including the use of leverage, may generate Unrelated Business Taxable Income (UBTI) or Unrelated Debt-Financed Income (UDFI).
Due Diligence: Account owners are responsible for reviewing offering documents, understanding fund requirements, and conducting their own due diligence.

Why Choose Mountain West IRA?

Experience Since 2006: Providing self-directed retirement account administration and recordkeeping services since 2006.

Client-Directed Administration: You choose the assets held within your account. We process transactions at your direction and maintain account records.

Alternative Asset Experience: Our team has experience administering accounts that hold a wide range of allowable alternative assets.

Educational Resources: Access guides, videos, webinars, and other resources to better understand self-directed retirement accounts.

Personalized Support: Get responsive assistance with account establishment, administration, and transaction processing.

Frequently Asked Questions

Can My Self-Directed IRA Hold Private Equity Funds?

Yes. A self-directed IRA may hold interests in certain professionally managed private equity funds that acquire ownership interests in privately held companies or other assets that are not publicly traded, provided the asset and transaction comply with applicable IRS rules and the fund's eligibility requirements.

What Should I Know Before Holding Private Equity Funds in a Self-Directed IRA?

Private equity funds may have limited liquidity, long holding periods, and specific eligibility requirements, including accredited investor qualifications. Certain funds may also generate Unrelated Business Taxable Income (UBTI), which could result in additional tax reporting and obligations for the IRA.

Account owners are responsible for reviewing the fund's offering documents, understanding its requirements, and conducting their own due diligence. Consult a qualified tax or legal professional regarding potential tax implications.