Hedge fund allocations by ultra high net worth individuals (UHNWIs) have fallen to 2% of their investment portfolios from around 12% over the past 16 years, and the asset class is effectively "dead" as an investment opportunity for the super rich, according to a report by CNBC citing Michael Sonnenfeld, Founder and Chairman of Tiger 21 — a network of UHNWIs and entrepreneurs.
The report quotes Sonnenfeldt: “Hedge funds are dead as a doornail — maintaining a steady position at 2% as members have limited their investment in this sector over the last decades”. He added that investors could get a similar exposure with lower fees by investing in index funds or private equity.
The latter currently accounts for the largest allocation of Tiger 21 members’ portfolios at 29%, while real estate investments (27%) and public equities (19%) are also on the 'most favoured' list.
Tiger 21, which has 1,300 members globally – largely first-generation wealth creators who collectively manage over $150bn worth of assets – provides a forum for the exchange of advice on wealth preservation, investments and philanthropy.
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