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6 Big Insights From Ultra-Wealthy Investors: Tiger 21 Conference

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Tiger 21, the peer-to-peer network for ultrawealthy investors, in mid-February rolled out the red carpet at its fifth annual members conference for some of the world’s leading thinkers on finance, investment and family relationships.

Speakers included real estate mogul Stephen Ross and Goldman Sachs’s Jeffrey Currie, and they were joined by prominent executives in the philanthropy and technology sectors, among them Patty Stonesifer, former chief executive at the Bill & Melinda Gates Foundation and currently president of Martha’s Table, and Nicholas Negroponte, co-founder of the MIT Media Lab and founder of One Laptop Per Child.

Republican presidential hopeful Jeb Bush participated in a Q&A, moderated by Greta Van Susteren of Fox News.

“Each year we are able to attract world-class presenters to the conference and this year’s lineup was especially outstanding,” Tiger 21’s founder and chairman, Michael Sonnenfeldt, said in a statement. “Whether the topic was related to finance or lifestyle, the speakers were compelling and thought-provoking.”

Following are the comments of six presenters, as summarized by Tiger 21.

James Grubman, wealth psychologist

James Grubman, wealth psychologist

Grubman spoke on the importance of understanding family wealth across generations. “Adjusting to wealth represents a major cultural change for a family whose roots are in the middle class,” he said.

Grubman said intrafamily communication was basic to the adaptation of the family and the adjustment of its members. “Family meetings may be the most important vehicle for accomplishing the myriad things needed in that adjustment process.”

(Check out Research magazine’s interview with Grubman: Mind Over Money.)

Jeffrey Currie, global head of commodity research at Goldman Sachs & Co.

Currie said arguments that shale would not be an integral part of the energy sector at least for the next 10 to 15 years underestimated what engineers had already accomplished and what they were capable of doing in the future.

“Shale has fundamentally changed the market,” Currie said. “The lead time between when you put money in the ground and when you get production has collapsed from anywhere from three to four years all the way down to 30 days.”

Stephen Ross, Chairman, Related Cos. (Photo: AP)

Stephen Ross, chairman and founder of Related Cos.

Related Cos. has offices and major real estate developments in New York, Chicago, Boston, Los Angeles, San Francisco, southern Florida, Shanghai, Abu Dhabi and São Paulo.  “You have to be on the ground and understanding the markets,” Ross said.

He stressed that the cities where Related develops properties show the most promise, but are also the most difficult ones in which to develop. “The best opportunities are where it is difficult to develop.”

Ross also commented on Related’s Hudson Yards development on the Hudson River, which he said would become the “new heart” of New York City. “The center of New York is Rockefeller Center, but that is now shifting west.”

He said Hudson Yards’ public square would be adorned by a monumental sculpture. “We are putting in what will be a 365-day-a-year Rockefeller Christmas Tree.”

Paul McCulley, former chief economist and managing director of PIMCO

McCulley said that the global economy as a whole was looking relatively good, especially in light of predictions five or six years ago. “It is a multi-speed economy with the U.S. at the top of the heap,” he said.

McCulley said his number one investment idea was the U.S. dollar. “From the standpoint of the opportunistic portion of a portfolio, where you are trying to actually make some serious money, don’t look at the U.S. — with one exception. Wherever you invest in the world, you want to hedge the currency back into U.S. dollars. I am an absolute bull on our currency.”

He also said that now was a good time to be a seller of real estate. “The huge revaluation of real estate and the cap-rate decline is over. Real estate is simply a rich, low-yielding asset now.”

Hans Rosling. co-founder, Rosling Education AB (Photo: AP)

Hans Rosling, co-founder of Rosling Education AB, who uses data to explain world events

Rosling discussed the effect of health, education and money on population trends.

He noted that the number of children in the world had stopped increasing. “This is the biggest event in the history of mankind that was ever completely missed by millions in the last five to 10 years.”

He said that as income and life in the U.S. had improved, children survived and women decided to have fewer and fewer children. “Now it is a quite stable demographic situation — which may be one of the main assets of this nation and may be one of the reasons for the now better economic growth in the U.S. than in Europe.”

Rosling also observed that a major shift is in population to urban areas had occurred. “The number of people in rural areas has stopped increasing.”

Jay Walker, curator of TEDMED

Walker, an entrepreneur who focuses on using digital networks to create new business systems, talked about the forces that will reshape the global economy. “The world will change more in the next 20 years than it has changed in the last 20,000 years when it comes to health and medicine,” he said.

Walker observed that the world was entering the age of biology. This will be “an age where computer science and computer technology and industrialization from the last century, which was largely not about us, is about to become all about us.”

— Check out Grantham, Arnott, 4 Others’ Investing Strategies: Tiger 21 Conference on ThinkAdvisor.