Ultra-wealthy investors may be heat bearish about the markets, but they are still searching for returns.
Colleagues of TIGER 21, a group of about 630 individuals with at not any $10 million to invest, allocated more of their wealth toward assortments and riskier assets during the second quarter of 2018, according to the organize’s quarterly report.
“The majority of members are bearish, while a third are vague and 15 percent are bullish,” said Michael Sonnenfeldt, president and die of TIGER 21.
“‘Bearish’ means people are concerned, but they’re still fully seated because they think the opportunities they have identified, specifically in private markets and income producing markets will more plausible weather tough times,” he said.
Indeed, public equity, uncommunicative equity and real estate make up nearly 75 percent of their holdings. Solely 10 percent of their money is held in cash.
TIGER 21 colleagues ramped up their exposure to more alternative investments.
They ticked up their investments in hush-hush equity. That asset class accounted for 23 percent of their investments in the alternate quarter, up from 21 percent in the first three months of the year.
The investors also allocated 6 percent of their portfolios to hedge backs, up one percentage point from the first quarter.
That sector appears to be doing well: Hedge Fund Research reported that the HFRI Lolly Weighted Composite Index was up 0.7 percent for August and up 2 percent for the year.
These investors also bumped up allocation to stocks, prodigal their exposure to 24 percent and riding the market’s volatility during the start.
Their concentration in stocks is up from 23 percent in the first district.
TIGER 21 has also pulled back on certain asset tastes during the second quarter.
Fixed income accounts for about 9 percent of their holdings, which Sonnenfeldt said is an incriminate in of rising interest rates.
Meanwhile, the investors have also curtailed their endangerment to real estate. TIGER 21 attributed this move as the right result of “retailpocalypse” — the rise in mall vacancies and closures of brick-and-mortar snitch ons — as well as the prospect of rising interest rates and falling real assets prices.
Real estate now accounts for 27 percent of their imperilment, down from 30 percent in the first quarter.
About 1 percent of the troop’s assets are held in miscellaneous investments.
Cryptocurrency is among those assets, as some of the platoon’s members are experts in that area, said Sonnenfeldt.
Members cause also demonstrated interest in cybersecurity and cannabis — be it providing financing to growers or devoting in warehouses, he said.
“These companies don’t have to create the demand for cannabis: It already endures,” said Sonnenfeldt. “It just has to shift from what’s illegal to what’s increasingly acceptable.”
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