PREFERRED INVESTMENT CLASSES AND ADVISORS OF THE ULTRA-WEALTHY
High-Net-Worth Group’s Members Favor Real Estate, Equities; Bullish on Europe and Asia
NEW YORK, Nov. 29, 2016 ‚Äì TIGER 21, the premier peer-to-peer learning network for high-net-worth investors, today announced the results of its seventh annual Member Favorites Survey. The report revealed public equities as Members’ preferred asset class, while real estate holdings and private equity continue to dominate their portfolio allocations.
The Member Favorites Survey covers the investment sentiments of TIGER 21’s 450+ Members, who collectively manage more than $45 billion in personal investable assets, to provide insight into their favored investment classes and the advisors that they consider most trusted and valuable.
Member Favorite Picks vs Asset Allocation: Real Estate and Equities
The most popular asset class was Public Equities, identified by 30% of Members as their favorite investment. Yet, in Members’ aggregate asset allocations, 19% of their portfolios were allocated to public equities, the lowest level observed for this asset class since 2011.
Members indicated their favored public equity sectors, in order of preference, as Financials, Technology and Energy. This was reflected in their top public equity picks, with four large-cap tech stocks (Alphabet Inc, Amazon, Apple Inc. and Microsoft Corporation) making the top 10 ‚Äì which also featured ExxonMobil, General Electric Company, Subsea 7 S.A and Blackstone Group LP. The Vanguard S&P 500 ETF and SPDR S&P 500 ETF topped the list of equity picks, in first and second place, respectively.
Real Estate was the second most favored asset class, with 27% of Members selecting it as a favorite investment. Real Estate now comprises 28% of the aggregate asset allocation of a typical Member’s portfolio, and is the single largest asset class overall. A further breakdown of Members’ real estate portfolios indicates that 42% of their holdings were direct investments into properties and developments; 40% were investments in personal and vacation homes; while funds and REITS made up 14% and 4% respectively.
Private Equity was identified as the third-favorite asset class. With 21% of Members’ portfolios now allotted to Private Equity investments, over two-thirds of this capital is invested directly through Members’ own or other private companies. This indicates Members’ preference to maximize control of their investments and minimize fees.
Hedge Funds were a distant fourth among the popular investment categories and made up just 6% of Members’ aggregate asset allocations. When categorized by investment strategy, Relative Value funds were shown to be most popular and then, in order of importance: Equity Long/Short, Event-Driven, Multi-Strategy, Macro and Fund of Funds.
“Our Members are sophisticated entrepreneurs seeking steady revenue streams. With low interest rates and ongoing market volatility, Members have significantly altered their investment decisions in recent years,” said Michael Sonnenfeldt, founder and chairman of TIGER 21.
“Because passive, fixed-income investments such as bonds offer limited returns our Members have added risk to generate returns. Many have turned to income-producing commercial properties, as well as private equity investments that ‚Äì despite their illiquidity ‚Äì provide a long-term potential while allowing our Members to rely on their innate entrepreneurial sensibilities and leverage their expertise in various industries. It is not surprising our Members are over-weighted on assets that are conventionally considered “risky” because they have a lifetime of experience successfully managing such risks.”
Market Capitalization and Sector Predictions
The Member Favorites Survey also asked Members to look to the future to identify the sectors and global markets where they anticipate the most opportunity. While approximately 89% of TIGER 21 Members’ investments are located in the North American market, 50% of planned investments in the coming year are estimated to be global. Europe and the East Asia & Pacific regions attracted most interest, representing 20% and 11% of the overall appetite for investments respectively.
Sonnenfeldt added: “Despite Brexit uncertainty, maybe even because of it, Europe remains an attractive region in which our Members are identifying considerable openings. The volatility and pace of change may well create outsized opportunities ‚Äì this factored into our decision to recently launch a London chapter, where we hope to help Members leverage collective acumen in order to identify and navigate the opportunities available to them.”
In terms of future investments and sectors considered likely to demonstrate optimal growth over the next three years, 34% of respondents singled out Technology as most promising. Healthcare was in second place, with 31% of responses, while the Energy sector represented 20% of responses.
Reliance on Wealth Advisors Diminishes
68% of TIGER 21 Members indicated they will employ the services of a wealth advisor at some point; while 32% will not utilize an advisor at all. The percentage of Members who expressed reliance on a wealth advisor for the majority of their decisions declined from 22% last year to just 18%.
“Though Members clearly value the input of trusted wealth advisors, we are seeing more and more Members turn to the indispensable insights of their peers when it comes to important decisions concerning their portfolio,” remarked Sonnenfeldt. “TIGER 21’s Group meetings offer Members a unique and confidential forum in which to discuss opportunities and challenges, and hear new perspectives, from other highly successful entrepreneurs with no ulterior motive or agenda other than to share ideas, insights and best practices.”
About TIGER 21
TIGER 21 (The Investment Group for Enhanced Results in the 21st Century) is North America’s premier peer-to-peer learning network for high-net-worth investors. TIGER 21’s Members are entrepreneurs, investment partners and top executives. TIGER 21 focuses on improving investment acumen as well as exploring common issues of wealth preservation, estate planning and family dynamics. Founded in 1999, TIGER 21 is headquartered in New York City and has groups in Atlanta, Austin, Boston, Chicago, Dallas, Denver, Houston, Los Angeles, Miami, New York, Newport Beach, CA, Palm Beach, San Diego, San Francisco, San Juan, PR, Seattle, Tysons Corner, VA, and Washington, DC as well as Canadian groups in Calgary, Edmonton, Montreal, Toronto, and Vancouver. TIGER 21 also launched a chapter in London, United Kingdom earlier this year.
More information can be found at www.TIGER21.com.