High-net-worth members of the Tiger 21 peer-to-peer learning network largely focused their wealth in private equity, real estate and public equities in the second quarter, according to the organization’s latest asset allocation report.
During the same period, members’ hedge fund allocations hit a new low.
The quarterly report measures the aggregate asset allocation of Tiger 21’s membership base on a trailing 12-month basis. The organization said this methodology tends to reveal substantive trends more clearly and is less affected by short-term distortions caused by growing membership.
The group comprises more than 500 investors in North America and London who collectively manage some $51 billion in personal investible assets.
Real Estate’s Ascent
Real estate allocations increased to 33%, up one percentage point from the first quarter and seven points higher than the same period in 2016.
“Many of our members created their wealth in the real estate industry, and subsequently continue to maintain significant holdings,” Tiger 21’s chairman and founder Michael Sonnenfeldt said in a statement.
“Various other factors — including historically low interest rates, public equity markets priced to perfection, and the anticipation that regulatory rollback is imminent — have significantly enhanced appetite for real estate investments.”
In contrast, a large segment of less affluent investors have failed to adjust their portfolios as the investment landscape has shifted, according to a recent study.
Tiger 21 investors’ private equity allocation rose by one point in the second quarter to 21%, while their public equity allocations fell from 21% in the first quarter to 20% — still a sizeable percentage of their overall assets, but the lowest reading seen since the 19% recorded in the second quarter of 2010.
“While our members clearly still embrace public equities as part of a diversified portfolio, it is no coincidence that private equity currently has the edge,” Sonnenfeldt said.