Ultra Rich Consent To HF Advice

Date: Tuesday, December 4, 2007
Author: Hedge Fund Daily

The ultra rich like to take risk more than the average investor, but even they seem to be nervous about hedge funds. According to the Spectrem Group’s latest report of the $25 million-plus investor club, 64% would not consider putting money in hedge funds without consulting an adviser, while 36% would. That contrasts with 56% of respondents who would chance investing in venture capital without an advisor and 55% of those looking into private equity who would do it solo. The most confident are those investing in commodities, with 71% saying they don’t need an adviser and 74% of those would tap into precious metals unassisted. The overwhelming reason why the ultra rich don’t use an adviser, according to 68% of the respondents is that “investing with these assets I something I enjoy doing. I view it as a hobby,” while 41% say they don’t want an adviser to handle their asset because they don’t want all my eggs in one basket.” Spectrem also found that in general the ultrawealthy are not as hot on alternative investments over the next 12 months as they are other instruments. While 65% of respondents say they plan to invest in equity and 58% in cash, and 49% in international investments, only 24% mentioned hedge funds, with 31% picking PE, 21% venturing into VC, and 21% landing some of their money in real estate investment trusts.