Do it yourself: The wealthy are increasingly looking to invest directly

The rich are looking to follow the family office model championed by billionaire families

TRD New York TRD WEEKEND EDITION /
Sep.September 23, 2018 10:00 AM

(Credit: Pixabay)

Billionaire families like the Dells and the Pritzkers know that the smart way to put their money to work is by investing directly. And now your average centimillionaire is catching on.

Instead of going through hedge funds, private equity and other traditional investment platforms, rich people are increasingly looking to “go direct” by investing their money straight into a business, Bloomberg News reported.

“Some wealthy people don’t like being in investment pools where they don’t have a say,” explained Cascadia Capital managing director Felix Herlihy. “The thinking is by going direct their performance over time will be superior. In a way, it’s saying, ‘I’m a little bit smarter.’”

Some investors are looking to get an early look at deals that haven’t already been picked over.

“There’s a ton of money out there still waiting to be deployed,” said Michael Tiedemann, chief executive officer of Tiedemann Wealth Management. “If the deal has reached your desk, and it is not an industry that you were an operator in, chances are it has been looked over and passed on by those who know much more about the competitive landscape than you.”

At a gathering in the Hamptons last month, a group of roughly 630 individuals with at least $10 million to invest known as Tiger 21 were discussing going direct, or do-it-yourself investing.

Tiger 21 investors increased their exposure to alternative investments like private equity, which accounted for 23 percent of their investments in the second quarter, according to CNBC. That was up from 21 percent in the previous quarter.

But at the same time they’ve scaled back investments in assets like real estate, thanks to concerns over the “retailpocalypse,” rising interest rates and falling real estate prices.

Real estate accounted for 30 percent of their portfolio in the first quarter of the year, but by the second quarter it had fallen to 27 percent, according to CNBC. [Bloomberg, CNBC] – Rich Bockmann


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Related chairman Stephen Ross and Related Companies Portfolio CEO Richard O’Toole withBronx Terminal Market and Time Warner Center (Getty, Google Maps, Wikipedia)

Related lays out $200M debt settlement plan for Tel Aviv bondholders

Related lays out $200M debt settlement plan for Tel Aviv bondholders
68 Gold Street with CW Realty CEO Cheskie Weisz and 1340 East Bay Avenue (Google Maps)

CW Realty purchase makes TRD’s mid-market i-sales list

CW Realty purchase makes TRD’s mid-market i-sales list
(iStock)

TRD Insights: The 56 REITs whose bonds the Fed will buy

TRD Insights: The 56 REITs whose bonds the Fed will buy
A rendering of 100 Claremont Avenue, Melissa Burch of Lendlease and Ron Moelis of L+M Development Partner (Getty, Robert A.M. Stern Architects)

L+M, Lendlease snag $250M loan for UWS tower

L+M, Lendlease snag $250M loan for UWS tower
From left: 172 Madison Avenue, 100 East 53rd Street, Woolworth Tower, 53 West 53rd Street, 615 10th Avenue

Loan wolves: Bankers are stalking developers as debts come due

Loan wolves: Bankers are stalking developers as debts come due
Isaac Zion

SL Green’s co-CIO leaving firm

SL Green’s co-CIO leaving firm
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...