Ultra-high-net worth investors have decreased their allocation to hedge funds in the past year and instead favor real estate and commodities, according to the Institute for Private Investors annual Family Performance Tracking Survey.
These findings aren’t all that surprising, according to Mindy Rosenthal, the executive director of the Institute for Private Investors.
“This year’s data reinforced the investment trends we have been seeing among the ultra-affluent as far as the rise in allocation to commodities and real estate, and the continuing popularity of direct investment in private companies,” she said.
Of the 57 families who responded to the survey, 62% reported using an advisor to manage half of their overall wealth, which is an all-time high. Rather than timing the market, about 50% of families reported they were “staying the course” when it came to their investments. However, 70% of families reported concern about geopolitical risk and domestic policy changes that would negatively influence their assets.
Forty-eight percent of respondents are concerned with finding investment opportunities that bring yield.
The survey reported some surprising results in terms of overall families’ returns last year. According to the survey, 2011 returns ran the gamut from a 10% decline to a 25.1% gain.
IPI provides networking resources for ultra-high-net-worth investors and advisors. The survey, now in its 13th year, measures annual expectations, returns and asset allocation of IPI member families who have a minimum of $30 million in assets.
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