Private equity offers the promise of occasional outstanding returns – but with the significant risk that some private equity investments will end with no return. To encourage investment, there are a range of significant tax concessions available for investors accessing private equity through Pooled Development Funds (PDFs).

PDFs invest in shares of small- to medium-size Australian companies, often in emerging markets or technology sectors. As a result, most PDF investments are in unlisted companies, although some

PDFs also hold shares in listed companies.

The Pooled Development Fund Program was established in 1992 to assist s...