Investment Strategies
Second Quarter Sees Shifts In Private Equity, Real Estate Holdings Among Tiger 21 Members
There were no drastic changes in asset allocation among high net worth investors in the exclusive TIGER 21 club during the second quarter, although the largest shifts were in private equity, real estate and cash.
Allocations to cash and cash equivalents decreased 2 percentage points from 12 per cent in the first quarter of 2013 to 10 per cent in the second quarter - the lowest allocation to cash by members since the third quarter of 2008.
By contrast, real estate allocation increased from 19 per cent in the first quarter of 2013 to 21 per cent in Q2, having either remained flat or declined for five consecutive quarters. Private equity allocation, meanwhile, decreased to 20 per cent - a decline of 2 percentage points from the first quarter of 2013 but 2 percentage points above its second quarter 2012 mark of 18 per cent.
“The reverse in the private equity numbers certainly does not indicate a disfavor by members with that asset class,” said Michael Sonnenfeldt, founder and chairman of TIGER 21.
Sonnenfeldt noted that private equity still makes up a “significant portion” of members’ portfolios, and is 11 percentage points higher than the low of 9 per cent logged in the final quarter of 2010.
“Rather, as prudent investors, TIGER 21 members hold a cautiously optimistic view of equities in general and slight shifts in allocation can be expected as some investments mature and members evaluate new opportunities,” he said.
Real estate - combined with public and private equities - accounts for around 60 per cent of members’ portfolios, Sonnenfeldt added. “It is as important asset class and one that many of our members have significant experience in.”
In other findings, fixed income and hedge funds experienced slight increases of 1 per cent in these categories as they moved to 15 per cent and 9 per cent respectively. There was no change in allocations to public equities, currencies, and commodities from last quarter, the report shows.
TIGER 21 is comprised of around 210 members with over $19 billion in combined investable assets.
