{"id":305680,"date":"2014-12-16T12:15:00","date_gmt":"2014-12-16T17:15:00","guid":{"rendered":"https:\/\/www.investmentexecutive.com\/uncategorized\/hnw-investors-turn-to-private-equity\/"},"modified":"2014-12-16T12:15:00","modified_gmt":"2014-12-16T17:15:00","slug":"hnw-investors-turn-to-private-equity","status":"publish","type":"post","link":"https:\/\/www.investmentexecutive.com\/news\/research-and-markets\/hnw-investors-turn-to-private-equity\/","title":{"rendered":"HNW investors turn to private equity"},"content":{"rendered":"

TIGER 21, a peer-to-peer learning network for high-net-worth investors in North America, has released its annual Member Favorites Survey showing that public equities, while still the most favored investment by a wide margin, lost ground to private equity and real estate over the past year.<\/p>\n

The survey of TIGER 21’s more than 290 members, who collectively manage approximately US$30 billion in investable assets, is designed to highlight members’ most preferred investments and managers.<\/p>\n

Public equities were named by 35% of members as a favorite investment, a decrease of six percentage points from a year ago. The most common public equity investment was individual stock purchases at 43%, a seven percentage point decrease from 2013 and a full 14 points below 2012. ETFs, at 25%, gained four percentage points from last year, followed by mutual funds\/long only funds at 17% and hedge funds at 14%.<\/p>\n

The most popular equity sectors according to respondents were financials at 27% followed by consumer discretionary and energy, both at 16%. The next most popular sectors were technology at 13% and health care at 11%.<\/p>\n

Apple Inc. (Nasdaq:AAPL<\/a>) and Berkshire Hathaway Inc. (NYSE:BRK.A<\/a>) again swapped spots for favorite single stock pick with Apple reclaiming the top position and Berkshire at number two. The next three favorite equity picks were SPDR S&P 500 ETF, Health Care SPDR ETF, and iShares MSCI Emerging Markets ETF.<\/p>\n

Nineteen per cent of members chose private equity as a favorite investment strategy this year, continuing the multi-year increase seen for this asset class. For the first time, the survey asked members how their private equity allocation breaks down. Sixty-three per cent of private equity investment is allocated to direct investments in members’ own companies, another 17% went to private companies that were not their own, and the remaining 20% was targeted to funds.<\/p>\n

Real estate moved from the fourth favorite investment strategy to number three at 16%, gaining one percentage point from last year. Residential real estate investments were named most often, followed by commercial investments.<\/p>\n

Hedge funds lost two percentage points from a year ago, with 15% of members selecting a hedge fund investment as their favorite for 2014. The hedge fund category broken down by investment strategy showed a bit of movement. Equity long\/short remained the most popular (39%), but declined by five percentage points. Relative value strategy (24%) moved up two positions to the second most popular strategy. Next was multi-strategy (12%) followed by event driven (9%), fund of funds (9%), and macro (6%).<\/p>\n

“Members’ allocation to hedge funds is at an all-time low,” said Sonnenfeldt. “Hedge funds used to be a primary substitute for public equities, but it is possible that members now feel they are getting more efficient equity exposure through ETFs and Indexes.”<\/p>\n

Fixed income was the fifth most popular investment category at 9%. For the third consecutive year, municipal bonds were the largest fixed income category member’s mentioned with exposure through mutual funds, individual names and managed portfolios from advisors.<\/p>\n

Commodities gained three percentage points to move to 4% this year. Energy commodities were the predominate investment listed by members.<\/p>\n

Cash and cash equivalents were named by 2% of members, same as in 2013.<\/p>\n","protected":false},"excerpt":{"rendered":"