TIGER 21 MEMBER FAVORITES SURVEY SHOWS EQUITY INVESTMENTS GAIN GROUND AS MOST FAVORED; HEDGE FUNDS REMAIN SECOND; PRIVATE EQUITY INVESTMENTS MOVE TO THIRD MOST FAVORED INVESTMENTS
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TIGER 21 Member Favorites Survey Shows Equity Investments Gain Ground as Most Favored; Hedge Funds Remain Second; Private Equity Investments Move to Third Most Favored Investments
New York, NY (October 26, 2012) ‚Äì A recent survey of TIGER 21 Members shows public equities remain the most favored investment of the premier learning group for high-net-worth investors in North America. The TIGER 21 Member Favorites Survey, which highlights Members’ most favored investments categorized by asset class, is in its third year.
The survey of TIGER 21 ‚Äì which now includes over 200 Members, who collectively manage more than $19 billion in investable assets ‚Äì shows that public equities again ranked as the most favored investment. In fact, the percentage of Members indicating that their favorite investment category is public equities rose from 31% in 2011 to 39% this year. Following public equities as the most favored investment, 19% of Members surveyed selected hedge funds, 15% selected investments in private equity, 11% selected investments in real estate, 8% selected investments in fixed income, while 4% selected investments in cash and cash equivalents and 3% selected investments in commodities as their favorite investments.
This marks the third year in a row that equity-themed investments ranked as the Members’ favorite, although allocations to various vehicles within this space have shifted from prior years. For Members listing individual stock purchases as their favorite investment, this category decreased from about 50% last year to 43% this year. However, Members listing investments in ETFs/Index Funds as favorites saw this category increase four percentage points to 23% this year. SPDR S&P 500, an ETF, was named as the second most popular equity pick this year, and there were five other ETF’s in the top 20 favorite equity picks. The Members’ third most favored method for gaining exposure to equity-themed investment strategies was hedge funds, with 21%. Lastly, investments in equities through vehicles such as mutual funds/long only funds increased to 13% in this year’s report.
For the second year in a row Apple (AAPL) was named the most popular individual stock among Members, with SPDR S&P 500 ETF (SPY), Berkshire Hathaway (BRK-A), Exxon Mobil (XOM) and Microsoft Corporation (MFST) rounding out the top five. The most favored public equity sectors for investment were (in order of importance) ETF’s, Financials, Energy, Healthcare, and Consumer Staples.
Notable in the equities investment category is the continued appeal of Master Limited Partnerships (MLPs), which provide tax benefits of a limited partnership with the liquidity of publicly traded securities. Members invested in MLPs either through MLP funds, direct investments into MLP equities, or baskets of equities managed by advisors. Chickasaw Capital Management LLC was included among Members’ favorite managers for its MLP Managed Accounts.
“The generally positive stock market performance over the past year may be partly responsible for the increase in the percentage of respondents who said public equities were their favorite investment in the past year. Yet, more telling might be the types of equities and the method of investing that Members have chosen,” said Michael Sonnenfeldt, founder and chairman of TIGER 21.19% of Members selected hedge funds as one of their favorite investments, and when broken down by specific investment strategy, Equity Long/Short funds made up 35% of hedge funds mentioned by Members. Event Driven funds followed at 18%, with Macro and Multi-Strategy funds each garnering 15% and Relative Value and Fund of Funds each with 9%.
15% of Members now indicate private equity as their favorite investment, and this was reflected in recent asset allocation reports where the private equity allocation of TIGER 21 Members’ portfolios jumped from 10% to 15% ‚Äì an historic high. Many Members favor direct investments in private companies over investing in funds, and this seems to be a growing trend.
When Members were asked to name favorite managers across all types of investments, hedge funds dominated the list. Favorite hedge fund managers included Alpine Associates Advisors, Balestra Capital Management LLC, Elliott Management Corporation, Millennium Management LLC, MKP Capital Management LLC, York Capital Management LLC, and Ramius Advisors LLC.
Joining that list once again as a favorite manager was Golub Capital Inc. (private equity), along with the previously mentioned Chickasaw Capital Management LLC (MLPs).
11% of Members indicated that real estate is their most favored investment. Only one manager was specifically mentioned ‚Äì Staubach Capital Partners LP (now part of Jones Lang LaSalle)- with Members also making direct real estate investments in specific properties and projects. Commercial real estate investments in shopping centers and office buildings were most popular.
Fixed income ranked as the fifth favorite investment this year, with Members preferring municipal bonds over other fixed income investments ‚Äì a continuing trend over the past three years of the survey.Only 3% of Members favored commodities, down from 7% last year. Gold and silver investments were of the most interest ‚Äì mainly through funds, although a few Members mentioned physical exposure to those metals.
“The Member Favorites Survey provides a snapshot of how complex the investing landscape can be and how Members’ appetite for certain investments shifts over time. The managers who were included on the favorites list are world class, but the list is certainly not all-inclusive. Through the TIGER 21 Headliner Series and monthly group meetings, Members are exposed to top managers representative of all asset classes. This helps our Members, the majority of whom take an active role in managing their portfolios, make informed decisions and it is all part of the continual learning process that our Members value,” said Sonnenfeldt.
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 200+ Members collectively manage over $19 billion in investable assets and are entrepreneurs, inventors and top executives. TIGER 21 focuses on improving investment acumen as well as exploring common issues of wealth preservation, estate planning and family dynamics beyond finance. Founded in 1999, TIGER 21 is headquartered in New York City and has groups in New York, Los Angeles, San Francisco, San Diego, Miami, Washington, DC, and Dallas, as well as Canadian groups in Vancouver, Toronto, Calgary and Montreal. More information can be found at www.tiger21.com.