HNWIs back alternatives

High net worth individuals are showing a greater appetite for investments in alternative strategies, according to research published by Spectrem Group.

New research published by Spectrem Group, a US financial research consultancy, has shown that wealthy individuals are showing considerable interest in alternative asset investments.

The reportThe Boom in Alternative Investments: Reaching the High Net Worth Investor’, suggests that the tendency towards alternative investments increases with wealth. 62 per cent of households with greater than $25m invest in alternative investments, compared to around 19 per cent of those with between $5-10m net worth.

The preferred investment for the very wealthy is private equity, with 14 per cent of all ultra high net worth (UHNW) households holding these investments. Private equity remains the preferred investment as it is perceived as the source of greater returns.

The report represents a turnaround for HNWIs, who were among those badly caught out in the technology boom and bust cycle. This latest report would suggest that HNWIs are making an earlier than expected return to investments.

The report also highlights the fact that alternative investors are highly involved investors, entrepreneurial and will take prudent risks to achieve their investment objectives. Over half (55 per cent) own or share ownership in a private business, compared with 36 per cent of traditional investors.