The ultra-rich live in isolation from the rest, and their investment strategies also look vastly different from the average investor’s portfolio. “Although there is no official threshold, centi-millionaires, or people with a combined net worth of more than $100 million, are a good indicator of entering the 0.001% club,” says Kevin Teng, chief executive of Wrise Wealth Management Singapore, a wealth management company in ultra high net worth individuals.
Globally, the population of centi-millionaires stands at about 28,420 and is largely concentrated in New York, Los Angeles, London and Beijing, according to data from Wrise cited by CNBC.
“These cities boast robust financial infrastructure, vibrant entrepreneurial ecosystems and lucrative real estate markets, making them attractive destinations for the ultra-wealthy,” says Teng.
“And this ‘super-wealth’ demographic is selective when it comes to investments,” he says. “They’re not investing in get-rich, quick, illiquid things today. For example, that means they don’t really do publicly traded stocks,” says Salvatore Buscemi, CEO of Dandrew Partners, a private family investment fund.
“They don’t actually even invest in crypto, believe it or not. What they’re looking for is to keep their legacy and their wealth,” Buscemi told CNBC.
In real estate
As a result, millionaires’ portfolios often include “very strong, stable pieces of real estate,” says Buscemi.
These wealthy individuals gravitate towards Class A properties of “trophy assets” or investment grade assets, usually built in the last 15 years. Michael Sonnenfeld, founder and chairman of Tiger 21 — a network of ultra-high-net-worth entrepreneurs and investors — told CNBC that real estate investments typically account for 27 percent of these individuals’ portfolios. 2.
“People with this kind of wealth typically manage their money from separate family companies that handle everything, including their inheritance, household bills, credit cards, immediate family expenses, etc.,” says Andrew Amoils, an analyst at the global wealth intelligence firm. New World Wealth.
“These family-owned companies often have philanthropic and venture capital divisions that invest in high-growth startups,” says Amoils. The number of family offices worldwide has tripled since 2019, surpassing 4,500 worldwide last year with nearly $6 trillion. dollars managed assets combined.
Alternative investments
Ultra-high-net-worth individuals are also exploring potentially buying stakes in professional sports teams, Dandrew Partners’ Buscemi said. “It’s a very, very insular group to get into, and it takes a lot more than money,” he says.
Exclusivity is a major draw, as 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 says.
“In the US, you get knighted when you buy an NFL team,” similar to how American businessman and billionaire Jerry Jones bought the Dallas Cowboys in 1989, the expert recalled. Wrise’s Teng also noted that 0.001% of people pay more attention to fixed income, private credit and alternative investments. He said private credit is gaining strength as investors seek sources of yield outside conventional markets.
