Ultra-wealthy investors, with their $25 million in household net worth, might be a tempting lure for advisors who want their business. But any professional money manager who wants them as clients has to sharpen his or her knowledge about alternative investments.

That’s because although these wealthy investors are casting a wary eye on investing conditions, they are still entrepreneurial risk takers at heart who like alternative investments such as hedge funds, according to findings from a new study by Chicago-based Spectrem Group.

Half of the ultra-high-net worth households that it surveyed earlier this year own hedge funds. The means holding was $4.6 million. That level of ownership represents a 43% increase in the hedge fund ownership from 2007, when just 35% of the wealthiest households invested in that asset class, according to Spectrem, which released its report on Tuesday. Spectrem fielded questions to 136 wealthy households in August for the study, called “The $25 Million-Plus Investor”.

This wealth segment is not just going after hedge funds. More than half, 56%, of households worth $25 million or more own private equity, and 52% of them hold venture capital. Those holdings represent increases from 39% and 37%, respectively. They also hold private placements, 49%, precious metals, 44%, and commodities, 38%. In terms of the distribution of investable assets, alternatives comprise about 20% of overall holdings in an ultra wealthy client’s portfolio. Stocks and bonds made up 20%; professionally managed accounts had 16%; mutual funds and deposit accounts each had 11%; other investments accounted for 14%, and rollover contributory and Roth IRAs had 9%.

This investor group is defined by several traits that explain their bolder investment choices. For one, more than half of them are still working and intend to increase their levels of wealth. About 40% intend to retire in the next 10 years.

“They are in a position where they can take more risk,” said Tom Wynn, a director at Spectrem Group. Also, a significant percentage of these households are business owners or senior corporate executives. That means they will eventually deal with issues revolving around their companies, or restricted stock.

Any financial advisor who approaches this group must be knowledgeable and proactive. And because they are savvy about finance and investments, all of the advice has to be sophisticated and not parochial. Indeed, 77% of the respondents said they enjoy investing, and 46% believed they could do a better job of investing than a professional advisor.

If it sounds like this is a demanding customer segment, it might be rooted in the fact that the group does have reservations about the effects of higher taxes and general economic conditions on their finances. Sixty-eight percent are investing in municipal bonds; 58% are meeting with, or have met with a tax planner or tax attorney; and 47% are revising estate plans.

Tiger 21, the peer-to-peer investing learning network for high-net-worth investors, uncovered a list of concerns among its wealthy members in a recent survey. Thirty-five percent expressed fears of political and credit risks associated with federal and municipal governments; 22% feared of a terrorist attack or major Middle East conflict, while 21% were apprehensive about general market volatility of a major crash.

“In today’s market assessing risk is an entirely new exercise,” said Michael Sonnenfeldt, founder and chairman of Tiger 21. “Previously, investors looked at past volatility as the determining factor on how to allocate assets, when in fact the only risk that matters is future risk.”