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November 21, 2018 at 02:49 PM
The world’s most successful entrepreneurs now invest 20.2% of their total wealth in equities, according to the fifth BNP Paribas global entrepreneur report, released Wednesday. The exception is ultra-high-net-worth entrepreneurs, whose heaviest weighting remains their own businesses.
For the first time in the study’s history, U.S. entrepreneurs’ top asset allocation choice was equities, outweighing their investments in fixed income, cash or even their own businesses.
The annual report examines how wealthy entrepreneurs around the world allocate their wealth and think about their roles in the economy.
The new report was based on an online survey conducted by Scorpio Partnership in July and August among 2,763 high-net-worth (investable assets between $10 million and $25 million) and ultra-high-net-worth (investable assets of $25 million or more) investors who owned businesses. Two-third of respondents, who represent a total net worth of $16 billion, were men and one-third were women.
In addition, Scorpio Partnership conducted in-depth interviews with BNP Paribas Wealth Management experts from the U.S., Europe, Asia and the Gulf Cooperation Council.
Fifty-five percent of entrepreneurs in the study have invested in technology companies, usually directly or through mutual funds. The appetite for tech is most voracious in Belgium, India and Singapore, where 79%, 74% and 70% of investors, respectively, invest in the sector, compared with 59% in the U.S.
The study found passive strategies on the rise, particularly in Asia. Thirty-six percent of entrepreneurs reported that they had invested through exchange-traded funds. ETFs with a technology overlay offer a cheaper alternative to access the stock market, the study noted.
PNB Paribas reported that across the world, entrepreneurs consistently place sustainable and responsible investment in their top five choices for growth potential, with those based in China, Spain and the U.K. most convinced — 35%, 32% and 27%, respectively, compared with 21% of U.S. entrepreneurs.
Ultra-wealthy entrepreneurs go farther, putting SRIs in their top two sectors for future investments, according to the study.
