Wealthy Americans turn to investments

CHICAGO:

Affluent Americans are more likely to allocate assets to alternative investment strategies in asset classes such as private equity, real estate investment trusts and hedge funds today than they have been for several years. That’s especially true for half of high-net-worth investors who say they are better off today than they were five years ago. The findings come from Northern Trust’s recent Wealth in America survey, which provides insights into the financial attitudes of 1,700 wealthy Americans.

Thirty percent of highnet-worth investors, defined as those with $5 million or more in investable assets, say they are more inclined to consider alternative investments now than they were five years ago. Among these high-net-worth investors, private equity ( 35 percent), managed futures ( 32 percent), REITs (28 percent) are their top investment alternatives choices followed by hedge funds (23 percent) and venture capital (17 percent). More than a quarter (28 percent) say limited partnerships are their preferred legal structure for holding these investments.

While not suitable for everyone, alternative investments can provide portfolio diversification as well as offer exposure to sources of return not available from traditional stocks and bonds, said Katie Nixon, Northern Trust’s Chief Investment Officer for Wealth Management.