What Is an SPV? A Complete Guide for Australian Private Market Investors

A Special Purpose Vehicle (SPV) is a separate legal entity created for a single, defined purpose. In Australian private markets, that purpose is almost always to hold shares in one specific private company on behalf of a group of investors who have pooled capital to acquire those shares. The SPV becomes the legal owner of the shares on the target company's register. Investors hold units or shares in the SPV itself, which gives them economic exposure to the underlying private company without appearing directly on its cap table.

SPVs are the dominant access structure for Australian wholesale and sophisticated investors looking to invest in pre-IPO companies, secondary share sales, or private market deals where direct individual investment is impractical. Almost every shares-based investment offered through platforms like NonPublic uses an SPV structure of some kind.

This guide explains what an SPV actually is, how Australian SPV structures differ from US versions, the tax treatment Australian investors should understand, the fees and governance you should look for, and the key risks worth weighing before committing capital.

Why SPVs exist in the first place

The core problem SPVs solve is logistical. Most high-value private companies do not want fifty or a hundred individual small investors on their cap table. The administrative burden of managing that many shareholders, the legal complexity of additional shareholder rights, and the operational distraction of investor communications all create friction that growing companies have no interest in absorbing.

The result is that private companies typically restrict cap table access to institutional investors, qualifying employees, and a small number of strategic holders. For a wholesale investor in Australia who wants to acquire a position in a company like SpaceX, OpenAI, or Anthropic, the practical pathway is rarely direct. It runs through an intermediary structure that consolidates capital from multiple investors into a single legal entity, which then acquires the shares as one shareholder on the company's register.

That intermediary structure is the SPV. From the target company's perspective, they are dealing with one shareholder, however many individual investors sit behind it. From the investor's perspective, the SPV's economic interest in the target company flows through proportionally to each participant's contribution.

The structure is widely used internationally and is the standard mechanism through which retail and wholesale investors access pre-IPO opportunities globally. Platforms like Forge Global, Hiive, EquityZen, and AngelList in the US, and NonPublic in Australia, all rely on SPV structures to facilitate access at scale.

Australian SPV structures: company vs unit trust

Where Australian SPVs differ meaningfully from their US counterparts is in legal form. US SPVs are almost always structured as Limited Liability Companies (LLCs) or Limited Partnerships (LPs). Neither structure exists in Australian law in the same form, so Australian SPVs use one of two domestic structures: a proprietary limited company (Pty Ltd) or a unit trust with a corporate trustee.

The Pty Ltd structure

A proprietary limited company is the simplest and most familiar structure for Australian investors. The SPV is registered with ASIC, receives an Australian Company Number (ACN), obtains an ABN, and operates as a separate legal person with limited liability for shareholders. Investors hold shares in the SPV in proportion to their investment. When the underlying company has an exit event, the SPV receives the proceeds and distributes them to shareholders according to the SPV's constitution and any shareholder agreements.

Sprintlaw's analysis of Australian SPV structures notes that Pty Ltd SPVs are popular for their direct setup, clear governance, and well-understood regulatory framework. The structure suits SPVs where investors want corporate-level certainty around governance and where the tax position is reasonably uncomplicated.

The main disadvantage is tax treatment. A company SPV pays company tax on its income and capital gains. When the SPV later distributes proceeds to shareholders, those distributions may be assessed as dividends with franking credits if the SPV has paid Australian tax, but the company SPV itself does not qualify for the 50% capital gains tax discount that flows through to individual investors in trust structures.

The unit trust structure

Unit trusts are the alternative structure, and the one that often produces better tax outcomes for Australian individual investors holding pre-IPO positions.

A unit trust SPV holds the underlying private company shares through a corporate trustee. Investors hold units in the trust in proportion to their investment. When the underlying company has an exit event, the trust receives the proceeds, distributes income and capital gains to unit holders, and the unit holders pay tax at their individual marginal rates rather than at the corporate rate.

The structural advantage is meaningful. As explained in Australian tax guidance, the net income and capital gains of a unit trust are distributed to unit holders pre-tax, meaning the trust itself doesn't pay tax. Each unit holder is taxed on their share of the distribution at their own marginal rate.

More importantly for pre-IPO investors, individual unit holders can typically access the 50% capital gains tax discount on assets held by the trust for 12 months or longer. This applies whether the gain is realised at an IPO, an acquisition, or a secondary sale of the SPV's shares. For investors holding pre-IPO positions for multiple years (which is the standard case), the CGT discount can materially improve after-tax returns compared to a company SPV structure.

The Australian Taxation Office classifies unit trusts as either fixed or non-fixed. Fixed unit trusts, where each unit holder's interest in income and capital is clearly defined and cannot be discretionarily varied by the trustee, are generally preferred for SPV use because they qualify for tax concessions more readily and provide investors with clearer ownership certainty.

Which structure your SPV actually uses

The structure choice depends on the platform offering the SPV, the nature of the underlying investment, and the typical investor profile. Most Australian SPV providers offering pre-IPO equity to individual wholesale investors use unit trust structures for the CGT discount benefit. Some platforms use Pty Ltd structures where the simplicity outweighs the tax considerations, or where the target investor base includes more corporate or trustee investors who don't access the 50% CGT discount directly.

Before subscribing to any SPV, the offering documents will identify which structure is being used. This is one of the first questions worth asking, because it affects your after-tax returns by a material amount if the SPV is held for more than 12 months.

What an Australian SPV actually does, step by step

The mechanics of an SPV are simpler than most investors expect.

The SPV is established as a new Pty Ltd company or unit trust. A platform or sponsor handles the legal registration, opens bank accounts, and prepares the constitution or trust deed that governs the SPV.

Investors subscribe for shares or units in the SPV. They sign a subscription agreement that records their capital commitment and confirms their wholesale investor status under the Corporations Act 2001.

The SPV consolidates the subscribed capital and uses it to acquire shares in the target private company. The shares are typically purchased from existing shareholders (early employees, venture investors, or institutional holders selling secondary positions) at a negotiated price.

Once the share purchase completes, the SPV becomes the legal owner of the shares on the target company's register. Individual investors do not appear on the cap table. They hold their economic interest indirectly through the SPV.

The SPV remains in existence holding the shares until a liquidity event occurs. This could be an IPO (where the SPV either distributes the listed shares to its investors or sells them and distributes cash proceeds), an acquisition (where the SPV receives cash or acquirer shares and distributes the proceeds), or a secondary sale (where the SPV sells some or all of its position to another buyer at a negotiated price).

When the liquidity event happens, the SPV calculates each investor's proportional share of the proceeds, deducts any agreed management fees and carried interest, and distributes the net amount to investors. The SPV is typically wound up shortly afterwards.

This is the basic mechanical flow. Real SPVs have additional complexity around governance, voting, fee mechanics, and structural protections, but the underlying process is well-established and consistent across the asset class.

Fees, carry, and what you're actually paying for

SPV fees are one of the areas where Australian investors should look most carefully before subscribing. Different platforms structure fees differently, and the cumulative impact on returns over a multi-year holding period can be substantial.

The three main fee components Australian SPV investors should understand are management fees, administration fees, and carried interest.

Management fees come first in most fee schedules and are typically charged as a percentage of subscribed capital, either upfront or annually. Industry-standard ranges sit between 1% and 3% per annum, with some platforms charging a one-time setup fee instead of recurring annual fees. The fee covers ongoing legal, accounting, compliance, and reporting costs for the SPV.

Administration fees are smaller line items covering specific activities such as annual ASIC fees, audit costs, and distribution processing. Some platforms bundle these into the management fee, while others itemise them separately. Either approach is acceptable provided the disclosure is clear before subscription.

Carried interest is the share of profits that goes to the SPV manager above a defined hurdle, and it tends to be the largest single fee component for successful investments. Industry-standard structures use a 20% carry above an 8% IRR hurdle, though Australian SPVs often use simpler structures with 20% of all profits above invested capital and no hurdle. The carry calculation matters substantially because it can convert a strong gross return into a more modest net return.

For pre-IPO positions that may hold for three to seven years before a liquidity event, the cumulative fee load is what determines net investor returns. A 2% annual management fee plus 20% carry on a position that doubles over five years can reduce the investor's net return from 100% to closer to 64%. Understanding the specific fee structure of any SPV before subscribing is non-optional.

ASIC's Report 820 on private credit funds, published in November 2025, identified opaque fee structures as one of the most consistent issues across the funds surveilled. While that report focuses on private credit rather than equity SPVs, the underlying observation applies. The quality of fee disclosure varies significantly between platforms, and Australian investors should treat clear, upfront fee disclosure as a quality signal.

Governance, voting, and your actual rights as an investor

A common misconception about SPV investment is that you have direct voting rights in the underlying company. You do not. The SPV holds the shares, and the SPV's manager or trustee votes those shares as a single block.

Your rights as an investor flow through the SPV's governing documents (the constitution for a Pty Ltd SPV, the trust deed for a unit trust). These documents specify how decisions get made within the SPV (typically by the manager or trustee, with limited investor input), what happens during specific exit scenarios such as an IPO, acquisition, tender offer or forced sale, how distributions are calculated and paid, what information rights you have around financial reporting and valuation updates, and what restrictions apply to transferring your units or shares to another party.

Reading the SPV's governing documents before subscribing is important. Not all SPV structures provide the same level of investor protection. Some allow the manager broad discretion in how the SPV operates. Others have more constrained mandates with clearer protections for investors.

Platforms operating under an Australian Financial Services Licence (AFSL) face higher regulatory standards around governance, conflict management, and investor disclosure than unlicensed offshore structures. NonPublic operates under AFSL #482668, which subjects all SPV offerings to the regulatory framework set out in the Corporations Act 2001.

Risks specific to SPV investing

SPVs concentrate certain risks that don't apply (or apply differently) to direct share ownership or fund investments.

Counterparty exposure to the SPV operator is the most basic concern. The SPV is a legal entity that depends on competent administration. If the manager or trustee fails to maintain the entity properly, your economic interest can be compromised by failures that have nothing to do with the underlying portfolio company. Choosing platforms with established operational track records and appropriate regulatory standing is the main mitigation available to investors.

Most SPVs hold one company, which means a single corporate failure takes the entire SPV value with it. Diversifying across multiple SPVs, sectors, and vintage years is the only meaningful response, and we cover this in more depth in our private markets risk article.

Information access matters more than most new SPV investors expect. As an indirect holder, you are several steps removed from the underlying business. The information you see is filtered through what the company chooses to disclose to its shareholders, then through what the SPV manager passes on to investors. Internal projections, board materials, customer churn data, and operational detail are typically not visible to you in real time.

Long holding periods compound the impact of fees in ways that gross-return projections obscure. The cumulative impact of management fees and carry over a five to seven year hold can substantially reduce gross returns. Modelling expected returns on a net-of-fees basis rather than a gross basis is essential when comparing SPV opportunities.

Exit timing creates the final source of uncertainty. The SPV holds the shares until a liquidity event occurs, and if the target company delays its IPO or pursues an acquisition that the SPV manager believes is suboptimal, the timing of your exit can extend significantly beyond the original expected horizon.

These risks are intrinsic to the SPV structure rather than evidence that SPVs are poor investment vehicles. They are reasons to choose operators carefully, size positions appropriately, and diversify across multiple opportunities where possible.

How SPVs compare to other private market access structures

For context, SPVs sit between two other common private market access structures.

Direct share ownership is the most concentrated, with the investor's name appearing directly on the target company's cap table. This is rarely available in Australia for pre-IPO investments in large global companies, and when it is available, it typically requires meaningful minimum investments (often US$1 million or more) and direct relationships with the target company.

Pooled fund investments through venture capital, private equity, or pre-IPO funds give investors exposure to a diversified portfolio of private companies managed by professional fund managers. The advantage is diversification. The disadvantages include higher fee loads (2-and-20 plus fund-level costs), reduced control over specific holdings, and longer typical lock-up periods (often 10 years for traditional PE structures).

SPVs occupy the middle ground. You get direct economic exposure to a specific company, with fees lower than full fund structures, and access at minimum sizes (typically A$10,000 to A$50,000 for retail SPV products through Australian platforms) that direct ownership cannot match. For investors who want intentional, company-specific exposure rather than diversified fund exposure, SPVs are the most efficient available structure.

The Australian context that matters most

The Australian SPV market has expanded significantly over the past five years as access to pre-IPO and private market opportunities has grown. The combination of an AFSL-regulated platform, unit trust structures providing 50% CGT discount eligibility, and increasing breadth of available deals has made Australian SPV investing meaningfully more attractive than it was when the only options were offshore platforms with no Australian tax optimisation and limited Australian regulatory protection.

For wholesale and sophisticated investors who qualify under the Corporations Act 2001, SPVs are the primary mechanism through which intentional exposure to specific pre-IPO companies becomes possible. Understanding how they work, what tax structure they use, what fees they charge, and what your rights actually are matters significantly more than most marketing materials suggest.

For Australian investors interested in exploring current SPV opportunities across companies including SpaceX, OpenAI, Anthropic, and Anduril, book an introduction call with the NonPublic team to discuss what's currently available and what would suit your circumstances.

For broader context on how private markets work in Australia, our 2025 Private Markets Landscape report provides additional analysis on the asset class.

NonPublic Pty Ltd (ABN 49 607 216 928) holds Australian Financial Services Licence #482668. Investments are available to wholesale and sophisticated investors as defined under the Corporations Act 2001. This content is general in nature and does not constitute financial product advice. It does not take into account your objectives, financial situation, or needs. Investing in private markets involves significant risk, including the potential loss of your entire investment. Past performance is not a reliable indicator of future results. You should obtain independent financial advice before making any investment decision.