Tiger 21: Real Estate Is Hot, Cash Is Not

Cautious members of the untrawealthy group take a small step back from private equity

Tiger 21 founder Michael Sonnenfeldt. Tiger 21 founder Michael Sonnenfeldt.

High-net-worth investors in the Tiger 21 networking group reduced their allocation to cash and cash equivalents to 10% in the second quarter from 12% in the previous three-month period.

The group’s latest asset allocation report  said this was members’ lowest allocation to cash since the third quarter of 2008.

Tiger 21’s more than 200 members across North America maintain investable assets upward of $19 billion. Their asset allocations are tracked quarterly.

The report showed no drastic changes in allocation, the largest shifts coming in private equity, real estate and cash.

The real estate allocation increased from 19% in the first quarter to 21% in the second quarter. This was the first upward movement after five consecutive quarters of flat or declining allocations.

Investors reduced their private equity allocation by two percentage points from the first quarter to 20%. This was still two points above the second quarter 2012 allocation of 18%.

“The reverse in the private equity numbers certainly does not indicate a disfavor by members with that asset class,” Michael Sonnenfeldt, Tiger 21’s founder and chairman, said in a statement, noting that the allocation is 11 percentage points higher than the low recorded in the fourth quarter of 2010.

Rather, he said, “members hold a cautiously optimistic view of equities in general and slight shifts in allocation can be expected as some investments mature and members evaluate new opportunities.”

Sonnenfeldt said the real estate allocation number was not surprising. “Combined with public and private equities, real estate comprises roughly 60% of members’ portfolios. It is an important asset class and one that many of our members have significant experience in.”

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