High net worth investors are continuing to shift assets into private equity, suggests a new report from TIGER 21, the learning group for HNW investors.
Highlights from the latest report, which measures investment exposure and the end of the first quarter of 2013, include continued growth in private equity allocations and a decrease in real estate with most other categories remaining flat.
Private equity allocation increased to 22%, a rise of three percentage points from the fourth quarter of 2012 and up 13 percentage points from a low of 9% as recent as fourth quarter of 2010.
“Private equity investments have always been a favorite of our members – who largely come from entrepreneurial backgrounds where they were actively involved in running companies,” explains Michael Sonnenfeldt, founder and chairman of TIGER 21.
“We believe the findings indicate that members are going back to ‘what they know best’ and are more focused than they were before 2008 on “keeping things simple,” he says.
“Most of the wealth in North America historically has been built by building businesses the old fashioned way or holding real estate as it has appreciated over time, so it is not surprising that roughly 60% of our portfolios are very roughly split between public equity, private equity and real estate,” continues Sonnenfeldt.
Real estate allocation decreased from 21% in the fourth quarter of 2012 to 19% in the first quarter of 2013.
Thane Stenner, managing director and founding member of TIGER 21 Canada, notes the Canadian real estate market is peaking, causing a shift by members in their allocation.
“In fact many have been selling their Canadian real estate holdings and buying US properties. We’ll continue to see Members gradually adjusted their portfolios over time, which is a prudent approach.”
To compile the report TIGER 21, whose more than 200 members throughout North American maintain investable assets in excess of $19 billion, collected member data measuring aggregate asset allocation exposures based upon members’ annual portfolio defense presentations.
The full report can be found here:
http://www.tiger21.com/docs/TIGER21AssetAllocationReport-1Q2013.pdf