The uber wealthy live in a world apart from the average investor, and this is reflected in their investing strategies. Centimillionaires, individuals with a total net worth of over $100 million, are part of the 0.001% club, according to Kevin Teng, CEO of WRISE Wealth Management Singapore. There are around 28,420 centimillionaires globally, mainly concentrated in cities like New York City, the Bay Area, Los Angeles, London, and Beijing. These cities offer robust financial infrastructure, vibrant entrepreneurial ecosystems, and lucrative real estate markets that appeal to the ultra-wealthy, making them attractive destinations for centimillionaires.
Centimillionaires are selective when it comes to investments as they focus on preserving their wealth and legacy. They do not invest in get-rich-quick schemes or illiquid assets, and they tend to avoid publicly traded equities and cryptocurrencies. Instead, their portfolios often feature stable real estate investments, particularly in “trophy asset” Class A properties that were built within the last 15 years. Real estate typically represents 27% of their portfolios, according to Michael Sonnenfeldt, founder of Tiger 21. They also rely on single family offices to manage their wealth, including household expenses, inheritance, and investments in high-growth startups and charities.
Aside from real estate, centimillionaires also explore alternative investments such as private credit, fixed income, and venture capital. Private credit, in particular, is gaining traction among these individuals as they seek unique risk-return profiles outside of conventional markets. The trend towards alternative investments reflects a growing appetite for non-traditional assets that offer diversification and potential sources of yield. Venture capital, private equity, and real assets are examples of alternative investments favored by centimillionaires as they look to expand their portfolios beyond traditional options.
Another unique investment avenue for centimillionaires is buying stakes in professional sports teams. This investment choice allows them to mingle with individuals of similar status and to legitimize their wealth. Owning a stake in a sports team is considered a prestigious achievement among the ultra-wealthy, akin to being knighted. This exclusivity and status symbol hold significant appeal for centimillionaires, drawing them towards investments that go beyond financial returns and into the realm of social prestige and recognition.
The investing strategies of centimillionaires are distinctively different from the average investor. Their focus on wealth preservation, diversification through alternative investments, and unique opportunities like owning stakes in sports teams set them apart in the world of high finance. As the population of centimillionaires continues to grow and their influence on global markets increases, understanding their investment strategies becomes crucial for individuals and institutions looking to navigate the complexities of ultra-wealth management.
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