Members of Tiger 21, a learning group for high-net-worth investors, continue to express confidence in private equity investments, according to the group's fourth-quarter 2013 asset allocation report.
The report provides a snapshot of how America’s affluent investors position their portfolios for wealth preservation.
“Tiger 21 members finished 2013 on a very positive note. Based on our members reported asset allocations, it is likely they earned in aggregate, on average, above 10 percent on their entire holdings last year. It is noteworthy that 2013 was almost certainly the best year since prior to 2008, by a long shot,” said Michael Sonnernfeldt, founder and chairman of Tiger 21.
Tiger 21s 230 members in North America had an average of 21 percent of their investments in private equities at the end of 2013, which is one percentage point lower than the all-time high of the first quarter of 2013. The average allocation had hovered between 9 percent and 13 percent from 2008 through 2011 before beginning a steady climb.
Investments in public equities also remained high at 23 percent, a one-percentage point drop from the previous quarter. Public equities have held at 21 percent or above since the first quarter of 2012.
Real estate also remained steady at 21 percent. Cash and cash equivalents remained at 11 percent, just one percentage point higher than their low of 10 percent recorded in the second quarter of 2013. At 14 percent, fixed-income also is one percentage point above its historic low in the second quarter of 2013.
“The big story in 2013 for our members was the continued display of confidence in private equity investments with a historically large allocation of 21 percent. Beginning in the second quarter of 2012, members started to shift allocations to private equity holdings and they have built on and maintained those positions this past year,” said Sonnenfeldt.
“This is dramatic and reflects members desire to roll up their shirtsleeves and get involved in building small businesses to create long-term value,” he says.