TIGER 21’S ULTRA-WEALTHY MEMBERS PILE MORE MONEY INTO REAL ESTATE
Hedge fund allocations were also up in Q2, while those to fixed income dropped
By Michael S. Fischer
Ultrawealthy members of the TIGER 21 peer-to-peer learning network again raised their allocation to real estate in the second quarter.
TIGER 21reported Wednesday that members’ real estate allocation increased by one percentage point from the first quarter to 30%, continuing a trend seen over the past four quarters.
This allocation represented a new high for the asset class, and was well above the 22% allocation in the second quarter of 2014.
TIGER 21 noted in a statement that a relatively large percentage of its members had created their wealth in the real estate business, and continued to own significant real estate portfolios.
“In the last year, TIGER 21 has experienced growth in its membership, [leading] us to suspect that the increased allocation is more a function of higher concentrations of real estate owned by newer members and significant increases in valuation, rather than shifting allocations within existing portfolios.”
The quarterly allocation report measures the aggregate asset allocation exposures of more than 330 members based upon their portfolio defense presentations. It is a snapshot of how these investors, with investable assets of some $30 billion total, position their portfolios for wealth preservation, TIGER 21 said.
Members’ allocation to hedge funds also increased in the second quarter, to 8% from 7%, their strongest allocation to the sector since 2013’s fourth quarter.
Only allocations to fixed income declined in the second quarter, falling two percentage points to 9%, which compared with a 14% allocation in the same period last year.
TIGER 21 said this was the lowest allocation to the asset class in the eight years it has been measuring member data, and was 14 percentage points below the 2009 allocation at the start of the recession.
All other asset classes remained unchanged in the second quarter:
- Public equities, 23% vs. 23% in Q2’14
- Private equity, 18% vs. 22% in Q2’14
- Cash, 10% vs. 11% in Q2’14
- Commodities, 0% vs. 1% in Q2’14