TIGER 21 SURVEY MEMBERS’ FAVORITE INVESTMENT STRATEGIES
TIGER 21 Survey of Members’ Favorite Investment Strategies Shows Public Equities Remain on Top with Private Equity Growing in AppealBerkshire Hathaway regains top stock pick status; Another ETF enters into top five selections
New York, NY (October 22, 2013) – TIGER 21, North America’s leading peer learning network for high-net-worth investors, released its annual Member Favorites Survey showing that public equities remain in the top spot for a fourth year in a row, with private equity playing an increasingly important role.
The survey of TIGER 21’s more than 220 Members, who collectively manage over $20 billion in investable assets, is designed to highlight Members’ most valued investments and managers.
Public Equities maintained its top position as the Member’s most favored investment category with 41% of respondents indicating equity-themed investments as their favorite, a two percentage point increase from 2012 and a full 10 points above its level in 2011. The most common public equity investment was individual stock purchases at 50% ‚Äì a 7% increase from 2012 levels. Following individual stock selection were ETFs/Index Funds at 21%. Hedge Funds and Long Only Mutual Funds tied as the third most popular equity-themed investment for Members at 14% each.
The most popular public equity sectors according to respondents are Financials (22%), Technology (20%), ETFs (19%), and Consumer (12%). All other sectors recorded single digit percentages. When asked to name their favorite stocks, Members chose Berkshire Hathaway (BRK-A), Apple (AAPL), iShares MSCI EAFE Index Fund (EFA), Qualcomm (QCOM), and SPDR S&P 500 (SPY) as the top five. Berkshire and Apple have been perennial favorites among Members and SPDR S&P 500 was also in the top five last year. This is the first year Qualcomm and iShares MSCI EAFE Index Fund took top spots.
“It is not surprising that public equities are among the most favored investments.What is more telling is how Members gain exposure to equities,” said Michael Sonnenfeldt, Founder and Chairman of TIGER 21. “We have seen ETFs gain popularity among Members in recent years as evidenced by the first ETF appearing in the top five picks in last year’s survey and a second appearing in the top five picks in this year’s survey.”
17% of Members chose Private Equity as a favored investment strategy this year, which is an increase from last year and continues a multiyear trend of increasing focus on private equity. Members have gained exposure in this asset class through funds as well as through direct investment into private companies. TIGER 21 Founder Sonnenfeldt continued, “The real story here is the growth in Members involvement with private companies, which is driving their exposure to private equity. Members are spending more time backing start ups, sitting on boards and getting involved with private companies because that is where they created their own wealth and they know it can be an engine of growth in their portfolio.”
At 17%, Hedge Funds dropped by two percentage points from last year’s survey when it was alone in the number two spot, and it is a full five percentage points below its ranking in the 2011 survey. The hedge funds category broken down by investment strategy showed equity long/short as most popular (44%), followed by Multi-Strategy Funds (22%), Event Driven Funds (15%), Relative Value (11%), Macro Funds (7%) and Fund of Funds (4%).
Real Estate investments remained in the number four spot on the Member Favorites Survey at 15%, an increase from 11% this category received in the 2012 survey. Members gain exposure to real estate through funds as well as direct investments in properties. It is interesting to note that real estate may be chosen as the “fourth favorite” investment, but it is the second largest allocation (21%). “This represents an example of Members faith in real estate’s long term value proposition, even though it doesn’t register as high when Members are considering what they are most ‚Äòexcited’ about,” added Sonnenfeldt.Fixed Income received 7% of responses and remained in the fifth spot in category rankings. Municipal Bonds were the largest fixed come product mentioned. Members also reported a fairly equal mixture of individual and managed portfolios in this category.
Cash, Cash Equivalents and Commodities rounded out the bottom of the favored investments, receiving 2% and 1% respectively. No Member mentioned currencies as a favorite category.
Asked to name their favorite managers across all types of investments, the top five responses were in line with the results of the top favorite investments. Two firms focused on Publicly Traded Master Limited Partnerships that concentrate on mid stream energy assets (with less focus on Exploration and Production): Chickasaw Capital Management, LLC and Neuberger Berman, LLC ‚Äì The Rachlin Group; two hedge funds were included ‚Äì Millennium Management LLC (multi strategy) and Elliot Management (distressed); and private equity shop Golub Capital, Inc that focuses on mezzanine loans to mid market lenders.
“These top five favorite managers are all repeats to our list and for good reason as they provide first-rate service and results. TIGER 21 regularly invites these and other world class managers and advisors to make presentations to our groups,” said Sonnenfeldt. “Our Members have sophisticated portfolios and rely on a number of sources ‚Äì including other Members as well as advisors/managers ‚Äì to make the most informed investment decisions.”
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 220+ Members collectively manage over $20 billion in their own 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. TIGER 21 has a group in formation in Seattle and plans to expand into Chicago, Palm Beach and Atlanta. More information can be found at www.tiger21.com.