The leading investing trends among ultra-affluent investors are injecting money in global markets, directly in private companies and in real assets, according to the Institute for Private Investors, which provides education and networking for investors and families with at least $30 million.
“The portfolio allocation and investment trends reported by ultra-affluent investors often lead the broader market. For example, IPI families began investing in hedge funds in the late 1990s, anticipating the wider move into hedge funds,” Mindy Rosenthal (left), IPI executive director, said in a statement. “We currently see three trends which are becoming increasingly important for ultra-high net worth investors.”
Investors have already shown they’re hungry for global investments. In 2011, families associated with IPI had almost one-third of their portfolio invested outside their domestic market. Almost half of families say they plan on increasing allocations to global equities this year.
“Investors are recognizing two things,” Rosenthal told AdvisorOne on Wednesday. “First, they recognize that domestic markets alone won’t achieve the returns they need.” Investors are also recognizing that the markets are increasingly connected, Rosenthal noted. “What happens in Greece will impact Europe, which will impact the United States,” she says. “It’s important to have global exposure.”
It’s important to note, she says, that “global does not mean Europe. It’s emerging and frontier markets, too.”
Commercial and residential real estate, gold, land and artwork are popular tangible assets among ultra-wealthy investors, IPI found.