UHNWIs are holding more cash amid market uncertainty

But real estate and private equity are gaining as confidence slowly returns

UHNWIs are holding more cash amid market uncertainty
Steve Randall

With the stock market currently rolling on a wave, the continued uncertainty of the dual health and economic crisis is making super-rich investors cautious.

While there is growing sentiment, thanks to vaccines, Ultra High Net Worth Individuals (UHNWIs) are holding more cash according to a recent report from TIGER 21, a member organization for wealthy investors.

Respondents from across Canada, the US, and the UK, reported holding raised levels of cash (16%) although this has decreased from 19% cash reserves in March 2020.

There has also been a material increase in asset classes such as real estate, private equities, public equities, venture capital and commodities.

Based on the first eleven months of 2020, respondents estimated an average of 14% on 2020 investment returns.

TIGER 21 Chairman Michael Sonnenfeldt said there was a huge change in 2020 but there is now increased confidence among HWWIs.

“They’re not highly confident but things are stabilizing a bit – and over the year, members did make changes. They first liquidated the public equities because those were the easiest but, as things stabilized, members have started tip-toeing back into real estate and private equity because that is where many members have created their wealth, so they can spot a great opportunity when it happens,” he said.

Opportunity in 2021

Sonnenfeldt says there are four key sectors that could provide opportunity for investors in the year ahead.

These are: Climate, Artificial Intelligence, Bitcoin/crypto, and   Philanthropy.

Broadly, technology remains the big one – certainly as long as the pandemic endures – followed closely by healthcare.