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Ultra rich embracing hedge funds, says Spectrem

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Despite the challenges faced by hedge funds in recent years, 50 per cent of households with a net worth of USD25m or more, not including primary residence, own hedge funds in 2010.



This is according to "The USD25m Plus Investor," a new report released by Spectrem Group.

This represents a 43 per cent increase in hedge fund ownership from 2007, when just 35 per cent of the wealthiest households invested in this alternative asset class. The mean hedge fund holding for this group is USD4.6m in 2010.

"While hedge funds have gotten something of a black eye in recent years, the nation’s wealthiest investors have not been scared off. In fact, substantially more of them invest in hedge funds today than back in 2007, prior to the depths of the financial crisis. With their exposure to private equity and venture capital also exceeding 2007 levels, it appears the richest Americans are not afraid to accept a little risk to help expand their portfolios," says George H. Walper, Jr., president of Spectrem Group.

More than half of households worth USD25m or more own private equity (56 per cent) and venture capital (52 per cent) in 2010 – up from 39 per cent and 37 per cent, respectively, in 2007.

Other alternatives this group holds in 2010 include private placements (49 per cent), precious metals (44 per cent) and commodities (38 per cent).

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