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(Bloomberg News) Wealthy investors plan to increase their allocations to commodities and
private companies while decreasing their cash holdings this year,
according to a new survey.
About 48
percent of respondents said they plan to add to commodities investments
during 2012 and 55 percent said they intend to make more direct
investments in private companies, according to a survey released yesterday by the Institute
for Private Investors. About 45 percent plan to increase real-estate
holdings, said IPI’s survey of its members, who are families with at
least $30 million in investable assets.
“It’s part
of that whole movement toward actually owning real assets,” said Mindy
Rosenthal, executive director of IPI.
“They’re looking at going back to the old school way of making money.”
The Dow
Jones-UBS Commodity Index fell 13.4 percent in 2011, according to data
compiled by Bloomberg. Real estate investment trusts returned 8.1
percent last year, according to the Bloomberg REIT Index of 129 publicly
traded property owners. Most REITs are publicly traded companies that
own and operate property including apartments and office buildings.
Commodities
and agricultural real-estate may be attractive ways to benefit from
growth and rising standards of living in emerging markets, said Michael
Tiedemann, chief investment officer of New York-based Tiedemann Wealth
Management, which manages about $6.5 billion. The firm may increase its
allocation to real estate, commodities and oil- and natural-gas
pipelines by as much as 4 percent through investments in private equity
and stocks in the next year, said Tiedemann, whose clients on average
have about $65 million under management.
About 36
percent of survey respondents said they’ll decrease cash holdings this
year. That may be because some families see market volatility as a
buying opportunity, Rosenthal said.
IPI members,
who were questioned in November, said they expected their portfolios to
return 4.9 percent on average for 2011.
Wealthy
families surveyed said they anticipate the Standard & Poor’s 500
Index will return 6.4 percent on average this year. The index returned
2.1 percent including dividends during 2011, according to data compiled
by Bloomberg.
About 70
individuals representing 70 families responded to IPI’s online survey of
its 345 member families. About 91 percent of IPI’s members reside in
the U.S. New York-based IPI provides education and networking for its
members.
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