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Two years after
the Government’s rule change on what can be invested in a
Self Invested Personal Pension (SIPP), twenty-one per cent of providers
are still not allowing investors to include private equity in their
SIPPs, according to research by Hotbed, the specialist supplier
of alternative asset investments.
53 per cent of respondents to the survey who do allow private equity
investments into their SIPPs, said that investing in unquoted companies
has been a growth area for SIPPs since A-day – 6 April 2006.
21 per cent of providers also restrict borrowing within SIPPs, other
than that secured against commercial property.
Although current SIPP regulation does not dictate a limit as to
what proportion of a portfolio can be allocated to private equity,
almost half (47 per cent) of those providers who do allow investment
said they impose their own restrictions on unquoted company investments,
other than those imposed by law.
“Not allowing investors to exercise their own freedom of choice
within the rules set down by the Government undermines the whole
concept of self-invested pensions,” commented Claire Madden,
director of Hotbed. “Many seasoned investors who welcomed
the chance to actually be able to invest for their retirement as
they saw fit when the SIPP rules were opened up are feeling very
frustrated.”
Madden added that laziness may be behind this reluctance to allow
some private equity investments into their SIPPs: “Some SIPP
providers appear to see unquoted companies as just too difficult
to bother with and are reluctant to try to accommodate these kinds
of investments.”
However, the key reason given for not allowing private equity was
that it is difficult to value companies.
The research also showed that 37 per cent of SIPP holders are permitted
to invest in prisons and 63 per cent in student halls of residence.
- Pensions Age
September 2008
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