Published On

January 5, 2015

Published In


Posted By:Mark Melin

Equity investments remained the allocation of choice for North America’s wealthy elite, butprivate equityand real estate gained ground in 2013, a survey ofTiger 21members found.

Tiger 21 found public equities the favorite investment

Tiger 21’s typically private membership found public equities the favorite investment of the year for 35 percent of their 290 members. This small group collectively manages near $30 billion in investible assets.

While it was still the favorite by a long shot, equities were down 6 percentage points from last year’s tally, while 19 percent of members chose private equity as their favorite investment. Closing in right behind private equity were real estate andhedge fund investments, favorites of 16 percent and 15 percent respectively of Tiger 21 members.

“Private equity continues to be a growing focus for our Members and for good reason. Members feel that investing in private equity is something they understand because so many Members created their wealth in private companies,” said Michael Sonnenfeldt, Founder and Chairman of TIGER 21, then he pointed to a unique investing benefit of his elite membership. “Also, Members like the superior access to information in private companies, so they are often among the first to learn about problems so they can pitch in and help solve them.”

Tiger 21: Equity Long/Short the most popular strategy

Interest inHedge Fundsstagnated in 2014, with the category overall down 2 percent from 2013. The most popular strategy wasequity Long/Short, voted most popular by 39 percent of members, But this is a decline of five percentage points. This loss was apparently to the benefit of the relative value strategy, which jumped two spots to the second most popular strategy with 24 percent finding this strategy most appealing. After this Multi-Strategy (12 percent) was trailing the pack along with event driven (9 percent), Fund of Funds (9 percent), and macro (6 percent).

To this Sonnenfeldt signs from the same playbook as many institutional investors:if a strategy is correlated to the stock marketand can’t beat index performance, go with alow cost ETF. “Members’ allocation to hedge funds is at an all-time low. With 40% growth in our membership this year (the strongest year in our 15 year history) it is unclear to what extent the low hedge fund allocations reflect different priorities in new Members’ portfolios or whether it is a further erosion in Members’ attraction to hedge funds,” said Sonnenfeldt. “Hedge funds used to be a primary substitute for public equities, but it is possible that Members now feel they are getting more efficient equity exposure through ETFs and Indexes.”