Investors with at least $25 million in net worth are boosting their exposure to alternative investments. At the same time, these UHNW households are keeping some money in familiar territory: tax-free municipal bonds. The Spectrem Group, a Chicago-based consulting firm, reached those conclusions in recent online and mail surveys.

Among those surveyed, 25% of total investable assets are in alternatives, compared to 20% percent in 2010 and 16% in 2007-that's an allocation increase of more than 50% in five years. "Wealthy investors are using all types of alternatives," said Spectrem Group president George Walper, Jr. "That includes hedge funds, venture capital, private equity, futures, and precious metals." Concurrently, UHNW investors' exposure to stocks and bonds, including restricted stock and options, has fallen from 21% of their total investments in 2007 to 20% in 2010 and 18% now.

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