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Members of Tiger 21, the peer-to-peer learning network for wealthy investors, raised their allocation to hedge funds by one percentage point to 6% in the second quarter, the highest level since the fourth quarter of 2016, the organization reported Monday.

The increased allocation to hedge funds, although small, “may be a reflection of rising interest rates as these funds, as a class, tend to perform better in periods of rising or higher interest rates,” Tiger 21’s founder and president Michael Sonnenfeldt said in an email message.

Hedge Fund Research reported in July that total hedge fund industry capital globally increased by $20.6 billion to a new record of $3.2 trillion in the second quarter.

Tiger 21’s quarterly reports measure the aggregate asset allocation of its 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 network’s members also raised their allocation to public equities by one point from the first quarter, to 24%. Public equities have been on an upward trend over the past year, after experiencing a low of 20% in the 2017 second quarter.

According to the report, investors have found significant opportunities in changes driven by the tax law, but the increased exposure to public equities remains relatively low in the context of the overall allocation, since Tiger 21 members have largely created their wealth starting and building small businesses and developing and investing in real estate.

“Our members are entrepreneurs who prefer to invest in vehicles where they have the most control — which explains why real estate and private equity combine for 50% of members’ overall portfolios,” Sonnenfeldt said.

For its part, members’ real estate allocation fell by three percentage points over the second quarter to 27%, and now is down six points from the second quarter of 2017. This was the largest quarterly shift in allocation over the last year, and was significant even by historical standards, according to the report.

It said several factors were likely affecting these shifts. One was what it called the continuing “retailpocalypse” and the prospect of higher interest rates leading to higher cap rates and lower real estate prices.

In addition, real estate assets within individual members’ portfolios are of such high relative value that some specific outlier transactions may be having a disproportionate effect. “However, it appears that this may be more of a trend than an anomaly,” the report said.

Tiger 21 investors’ private equity allocation increased by two points to 23% in the second quarter. Fixed income and cash and cash equivalents held steady, at 9% and 10%. And commodities dropped from one percentage point back to zero.