Wholesale investing
Investment opportunities for sophisticated investors in Australia: how the options compare in 2026
Qualifying as a wholesale or sophisticated investor opens doors that retail investors never see. Here is what is realistically on offer in November 2026, and how each option compares on income, control and getting out.
Sophisticated and wholesale investors in Australia can access term deposits, bonds and listed shares like anyone else, plus unlisted private credit, wholesale funds, private placements and directly co-funded secured loans. The useful way to compare them is not headline income alone but three questions: who controls the decision, how you get out, and what you hold if something goes wrong.
This page lays the options side by side as at November 2026. It is written by HomeSec Business Finance, an Australian private lender founded in 2004 that invites wholesale investors to co-fund some of its secured loans. We have a view, and we will say where it fits and where it does not.
Who gets access to wholesale investment opportunities?
Most unlisted offers in Australia are open only to wholesale clients, a category that skips the product disclosure statement a retail offer needs. In practice, you qualify with an accountant’s certificate, no more than two years old, showing net assets of at least $2.5 million or gross income of at least $250,000 in each of the last two financial years.
Those figures were set in 2001 and have not moved. The Parliamentary Joint Committee on Corporations and Financial Services reviewed the tests in 2024 and 2025 and did not recommend lifting them, which is why a growing share of households, many on the strength of a home and super, now clear the bar. Our guides to the accountant’s certificate and to wholesale versus sophisticated status cover the paperwork.
The catch is simple. Qualifying removes a layer of paperwork protection. Nobody hands you a disclosure document that has been through the retail regime, so the checking is yours.
What has changed for investors in late 2026?
Three things have shifted the picture since the start of the year.
Cash pays more. The RBA lifted the cash rate target to 4.85% effective 4 November 2026. As at the latest comparison data, the best 12-month term deposits sit around 5.3% to 5.5%. That is a respectable yield for money you can lock away with a bank, and it raises the bar for anything riskier to clear.
Private credit is under the microscope. ASIC’s reviews found issues across the sector, from opaque fees and conflicts to infrequent valuations. In September 2026 it told the industry to “prepare for enforcement action”, and several managers had already limited withdrawals in August. Our Metrics freeze explainer shows what that looks like from the investor’s side.
Wholesale does not mean pooled. Some of the most useful opportunities are not funds at all. They are individual assets you can look at, price and hold in your own name.
How do the main wholesale options compare?
| Option | Typical income | Who decides | Getting out | What you hold |
|---|---|---|---|---|
| Term deposit | Fixed, about 5.3% to 5.5% at the top end | You, once | At maturity, or early with a penalty | A bank deposit (government guarantee up to $250,000 per bank) |
| Bonds and hybrids | Fixed or floating, price can move | You | Sell on market, price varies | A tradable security |
| Listed shares and property trusts | Dividends plus growth, with swings | You | Sell any trading day | Shares or units |
| Unlisted wholesale credit fund | Often single-digit | The manager | Redemption terms the manager can change | Units in a pool |
| Private placement or unlisted raising | Varies widely, often growth-based | You, once | Often none until a sale or listing | Shares in a private company |
| Direct co-funding of a secured loan | 12% to 18% p.a. on loans you choose | You, loan by loan | Repaid at maturity, early buy-out available | A named share of a registered mortgage |
Long-run context helps. Vanguard’s index chart shows that over the 30 years to 30 June 2026, Australian shares averaged 9.0% annually, listed property 7.8%, bonds 5.2% and cash 4.0%. Those are the benchmarks that any higher-yielding option has to justify with its extra risk or illiquidity.
Which options suit income rather than growth?
If the goal is passive income, you can sort the table into two camps.
Growth-oriented options such as shares, property trusts and private placements pay unevenly. You can do well, but you cannot count on a monthly or quarterly cash flow, and a falling market can hit the capital you are drawing from.
Income-oriented options are term deposits, bonds, credit funds and secured loans. Here the questions change. What is the income actually secured against? Can the manager or issuer change the terms? And if you needed the money in six months, what would that look like?
Many investors blend the two: a growth sleeve for the long term, plus an income sleeve they want predictable and visible. Our $1 million allocation guide shows how some investors split that.
What is the real difference between a fund and a direct loan?
In a pooled credit or mortgage fund, you own units. The manager picks the loans, values them, sets redemption terms and decides what to tell you. ASIC’s review of 28 private credit funds found weak conflicts policies, the same committees approving and valuing loans, and side letters giving some investors better redemption terms. None of that is visible from the product sheet.
In a directly co-funded loan, you are lending into one specific loan. HomeSec sources and assesses each loan against a 50-point due diligence checklist and emails you a pack. You decide whether to fund and how much, and you are named on the registered mortgage for your exact contribution, alongside HomeSec, whose own money is in the same loan. Principal and interest are paid straight to your own bank account. We cover this in more detail in direct mortgage investment versus pooled funds.
There is no pool to freeze, because there is no pool. That does not remove risk, and a loan can still go wrong. What it changes is that you can see the asset, and nobody can gate your access to it.
What does co-funding a secured loan actually look like?
Loans are short term business loans of 1 to 12 months, secured by registered first and second mortgages over Australian real estate. The maximum LVR is 80% on residential property, with lower LVRs on commercial property, and there are no development or construction loans. Our lending rules set this out.
Returns of 12% to 18% p.a. on the loans you choose are higher than bank deposits for a reason that has nothing to do with weak borrowers. Terms are short, and borrowers pay a premium for speed: letters of offer in hours and settlement possible within days.
Illustrative example. An investor puts $250,000 into one loan with a 6-month term, secured by a registered mortgage over a residential property. They review the pack, fund from their own account and are named on the mortgage. At maturity, principal and interest go back to that account and the investor decides whether to take another loan. If they would rather stop, they simply do not take the next one.
That cycle is the feature. Capital comes back every few months, so you reassess instead of being locked into a manager’s strategy. The flip side is reinvestment: you need a steady flow of suitable loans to stay fully deployed.
If you want to see what a pack contains before deciding anything, you can register your interest and ask for an example.
What should you check before committing to any wholesale option?
A short checklist works across every row of the table:
- Exit terms in writing. Who can pause or limit withdrawals, and under what circumstances?
- Security and ranking. What exactly stands behind your money, and where do you rank?
- Valuation process. Who values the assets, how often, and is that person independent of whoever approves the deal?
- Manager alignment. Does the manager have its own money in the same position, and how do they get paid?
- Fee visibility. Are borrower fees and investor fees shown separately?
- Structure fit. For an SMSF, do the trust deed and investment strategy allow it? SMSFs can lend to unrelated parties on documented, arm’s-length terms, but there are strict ATO limits on related-party investments.
Our loan pack due diligence guide and manager questions list turn this into the specific questions to ask.
How is income from these investments taxed?
Keep this general: interest is assessable income in the hands of whoever owns the investment, whether an individual, company, trust or SMSF. Lending is an input-taxed financial supply, so interest is not subject to GST. Your accountant can tell you how the entity you invest through changes the outcome.
Where could co-funding fit in your own mix?
If you already hold cash, shares and perhaps property, the gap many wholesale investors notice is a source of secured income they can see and control, without handing the decisions to a manager. That is the slot co-funding is built to fill, and it works best as one sleeve rather than the whole portfolio.
If that sounds like the missing piece, the next step is a conversation, not a commitment. Talk to our Funding Manager about how co-funding works, what a loan pack looks like and whether it suits you, and then ask for the next loan pack when one comes up. You choose each loan, and there is no obligation to take any of them. Register your interest →
Frequently asked questions
What counts as a sophisticated investor in Australia?
For most offers, you qualify with an accountant's certificate, no more than two years old, showing net assets of at least $2.5 million or gross income of at least $250,000 in each of the last two financial years. Offers can also be made to professional investors. The thresholds have not changed since 2001.
What investment opportunities are only open to wholesale investors?
Mostly unlisted products that skip the retail disclosure regime: wholesale private credit and property funds, private placements, unlisted company raisings and directly co-funded secured loans. Listed shares, bonds and term deposits are open to everyone.
Are wholesale investments riskier than retail ones?
Not automatically, but you get fewer regulatory protections, such as a product disclosure statement and ASIC's design and distribution obligations. The work of checking the structure, the security and the exit shifts to you, which is why due diligence matters more.
Which wholesale investments can I exit most easily?
Listed investments and term deposits are the easiest to exit. Unlisted funds depend on redemption terms the manager can change or suspend. Directly funded loans return your principal when the loan matures, and HomeSec will buy out an investor's share if they want out early.
Can an SMSF invest in these opportunities?
Yes, if the trust deed and investment strategy allow it and the investment is on arm's-length terms. SMSFs commonly co-fund secured loans to unrelated borrowers, with the loan held in the name of the trustee. Related-party investments face tight ATO limits.
How do I see an example of a co-funded loan?
Register your interest and our Funding Manager will explain how it works and what a due diligence pack contains. You can then decide, loan by loan, whether to fund and how much. There is no obligation to take any loan.
Sources
- RBA — Cash rate target
- ASIC — Private credit report 814 media release (September 2025)
- ASIC — Report 820, review of 28 private credit funds (November 2025)
- ABC News — ASIC lays down the law to the private credit sector (22 September 2026)
- Vanguard — Index chart (30 years to 30 June 2026)
- Finder — Term deposits
- ATO — Financial supplies (input-taxed sales)
- ATO — SMSF investment restrictions
Figures are as at 7 November 2026 unless stated. This page is reviewed by Paul Stone, Joint CEO & Founder of HomeSec Business Finance, and updated as markets change.
