GETTING PERSONAL CANADA: FOLLOWING THE MONEYED

GETTING PERSONAL CANADA: Following The MoneyedBy Evelyn Juan of Dow Jones NewswiresApril 23, 2012TORONTO (Dow Jones)–It’s one thing to follow the money, but another to follow the moneyed. For those who arecurious, the members of Tiger 21, an exclusive group of North American investors with at least $10 million in liquidassets, have been investing more in real estate and private equity.Tiger 21’s latest asset allocation survey shows that members held around $18 billion in assets during the firstquarter of the year, up 20% from last year’s $15 billion during the same quarter. Robert Daniel, Tiger 21’s directorof research, says roughly $2 billion is held by Canadian members, who comprise roughly 20% of the group’s 200members.The group is based in New York but includes chapters in Vancouver, Toronto, Calgary and Montreal. The membersmeet to hear presentations from business and financial experts, and to swap investment ideas.Real estate, public equity, and fixed-income sectors account for the majority of the members’ assets. However,investments in public equity dropped 8.3% during the quarter, and fixed income slid further by 25% among thesegroup of millionaires. Cash investments, which posted the highest asset increase last year from 2010, saw thesteepest drop this year.Thane Stenner, managing director and founding member of Tiger 21 Canada and investment adviser at GMPCapital’s (GMP.T) Richardson GMP, says the average 1% yield in cash has been frustrating for most members.The volatile equity markets and an anticipation of interest rates increasing over the next two to five years aren’tmaking members enthusiastic about the equity and bond markets.”There’s a sense from Tiger 21 members that they want to get back into some things that are less volatile and moreincome- and yield-generating,” says Stenner. “They are used to having their assets produce for them.”As an alternative, more millionaires are looking for bargains now in real estate and picking up properties in Florida,California, and Arizona, says Stenner. Some are also into real estate investment trusts and limited partnerships withspecial mandates to invest in real estate globally.Assets in real estate among Tiger 21 members increased by 26% during the first quarter, compared with last year’s27% first-quarter drop. Investments in hedge funds surged by 28% but the biggest gainer was private equity, whichrose by 40% and currently accounts for 14% of the members’ overall asset pie.Stenner said some members see interest in private equity, particularly in the technology space and secondarymarkets that provide liquidity to distressed sellers. He sees continued interest in hedge funds and real estate in thecoming months. Cash will continue to shrink, fixed-income demand will remain stable, and public equity funds willincrease a bit though not significantly, Stenner foresees.Tiger 21 members “are definitely doing their homework,” says Stenner. “They’re looking not just to survive, but tothrive.”