Where the Wealthy Are Moving Assets



Published On

June 9, 2014

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THURSDAY, JANUARY 24, 2013 ¬©2013 Dow Jones & Company. All Rights ReservedWhere the Wealthy Are Moving AssetsBy JULIE STEINBERGUltra-high-net-worth investors are shifting moreof their portfolios toward either public or privateequity, according to two recent surveys.The asset-allocation report for the fourth quarterof 2012 for TIGER 21, a peer-to-peer networkfor investors with between $10 million and $100million in investible assets, found that membersallocated 19% of their assets to private equity, upfrom 13% a year earlier.TIGER 21 members tend to have created theirown wealth, says founder Michael Sonnenfeldt, andthey’re searching for ways to generate returns in alow-interest rate environment by going back to howthey made money: through building companies.The survey found that members allocated 24%of their portfolios toward public equities, or stocks,compared to 21% a year earlier. The total was thehighest level allocated toward stocks since the firstquarter of 2011. This shift is emblematic of what’shappening across the high-net-worth investor spaceas the economy becomes more stable, jobs “creepback” and investors feel more comfortable, saysSonnenfeldt.Still, allocations to cash and its equivalentstotaled 12% in the fourth quarter, a sign that investors are keen to have a buffer against anotherfinancial crisis, he says.Allocations to hedge funds decreased to 7% inthe fourth quarter of 2012 from 9% a year earlier,while allocations to fixed income decreased to 14%from 16% a year earlier.In another corner of the high-net worthspace, investors are plowing into stocks and cashinstruments. According to market research firmSpectrem Group’s recent survey, 71% of respondentswith between $5 million and $25 million in networth, not including a primary residence, willinvest or invest more in equities over the next 12months, up from 52% in 2010.Some 51% of respondents said they plan to investor invest more in cash-based instruments over thenext 12 months.”Wealthy investors remain cautious because of theongoing economic and political uncertainties. As aresult, they are balancing their increased exposureto equities by retaining a sizable amount of cash,”George H. Walper Jr., Spectrem’s president, said ina statement.The 2012 UHNW Investor report was completedin winter 2012 and surveyed 537 respondents.