Affluent investors appear comfortable with their current holdings, suggests a new report from TIGER 21, a learning group for high net worth investors in North America.

The current report represents the investment exposure of US$19 billion in investable assets controlled by the group’s 200 members as of the end of the third quarter of 2012.

The allocation structure for TIGER 21 members remained relatively static when compared with last quarter’s report. The only noticeable differences were a decrease in the allocation to hedge funds from 8% to 7% and an equal increase in the public equity allocation from 22% to 23%. All other categories remained unchanged.

“The theme running through the Third Quarter Asset Allocation Report echoes the sentiment I’ve heard from many HNW individuals,” says Thane Stenner, managing director and founding member of TIGER 21 Canada.

“By and large, they’re comfortable with their current holdings. While they’re not finding a lot of screaming bargains out there, they don’t seem to be paying all that much attention to those who are predicting a stock market collapse either,” he says.

Regarding members’ 13% allocation to fixed income – the lowest level since the start of the financial crisis in 2007, Stenner says, “High net worth investors are preparing for the inevitable rise in interest rates. When rates rise, government bond holders are going to be hurting. It seems the wealthy are getting off the train before it goes over the cliff.”

Private equity investment remains at a five year high of 18% of members’ portfolios – which includes investments in funds as well as direct investments in businesses. “The high level of private equity allocation is hardly surprising considering that many TIGER 21 Members like to be in control of their own destinies. They often feel more comfortable with operating business risk than with stock market risk,” says Stenner.

Equity exposures have been trending upward over the past five quarters. Although allocations have not returned to levels seen in the last six months of 2008, there has been increasing interest in this space over the past year, to 23% from 21%.

Hedge fund allocations continue to scale back. At a current allocation level of 7%, this is below the median trend of 9% seen over the past few quarters and the lowest level seen since the first quarter of last year.