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This is where the world’s top 0.001% are putting their money, according to wealth experts




This is where the world's top 0.001% are putting their money, according to wealth experts

Yana Iskayeva | Moment | Getty Images

The very rich live in a different world and their investment strategies also look very different from the portfolio of the average investor.

“While there is no official threshold, centimillionaires or individuals with a total net worth of more than $100 million are a good benchmark for entering the 0.001% club,” said Kevin Teng, CEO of WRISE Wealth Management Singapore, a wealth firm for ultra- industrial companies. -HNWIs.

The population worldwide is centimillionaires amounts to approximately 28,420 individualsand are largely concentrated in New York City, the Bay Area, Los Angeles, London and Beijing, according to WRISE data.

They give you a knighthood in the United States if you buy an NFL team.

Salvatore Buscemi

CEO of Dandrew Partners

“These cities have robust financial infrastructure, vibrant entrepreneurial ecosystems and lucrative real estate markets, making them attractive destinations for the ultra-wealthy,” Teng told CNBC.

And this demographic that “embodies extreme wealth” is selective when it comes to investments, Teng said.

“They’re not investing in get-rich-quick schemes these days, in illiquid things. That means, for example, they’re not really investing in publicly traded stocks,” said Salvatore Buscemi, CEO of Dandrew Partners, a private investment firm for families.

“They actually don’t even invest in crypto, believe it or not,” Buscemi told CNBC via Zoom. “What they’re looking for is to preserve their legacy and their wealth.”

1. Real estate

As a result, centimillionaires’ portfolios often include “very strong, stable pieces of real estate,” Buscemi said. These Wealthy Individuals Tend to Have ‘Trophy Possessions’ Class A propertiesor investment grade assets typically built within the last fifteen years.

Port of Monaco on the French Riviera.

Silvain Sonnet | Getty Images

Michael Sonnenfeldt, founder and chairman of Tiger 21 – a network of ultra-high-net-worth entrepreneurs and investors – told CNBC that real estate investments typically represent 27% of these individuals’ portfolios.

2. Family offices as an investment vehicle

Individuals with such wealth generally have their money managed by individual family offices, which handle everything including their inheritance, household bills, credit cards, immediate family expenses, etc., says Andrew Amoils, an analyst at global wealth intelligence firm New World Wealth .

“These family offices often have charitable foundations and venture capital funds that invest in high-growth startups,” Amoils said.

The number of family offices in the world has tripled since 2019, to more than 4,500 worldwide last year, with an estimated $6 trillion in assets under management.

3. Alternative investments?

Ultra-high-net-worth individuals are also exploring potential buying interests in professional sports teams, according to Dandrew’s Buscemi.

“That’s a very, very isolated group to get into and it takes a lot more than just money,” he said.

The exclusivity is a big draw because these wealthy individuals want to mingle with people of similar status, Buscemi explains. Owning a stake in a sports team is a way for these individuals to legitimize their status, he said.

Dallas Cowboys owner Jerry Jones welcomes fans to training camp at the River Ridge Complex on July 24, 2021 in Oxnard, California.

Jayne Kamin-Oncea | Getty Images Sports | Getty Images

“In the United States, if you buy an NFL team, they give you a knighthood,” he said, just as American businessman and billionaire Jerry Jones bought the Dallas Cowboys in 1989.

WRISE’s Teng also noted that 0.001% of individuals are paying more attention to fixed income, private credit and alternative investments. He said private credit is gaining momentum as investors look for sources of returns outside conventional markets

“This trend reflects a growing demand for non-traditional assets that offer unique risk-return profiles,” Teng said, noting that alternative investments include venture capital, private equity and real assets.