Wealthy moving to hedge funds
Published October 24th, 2007
The world’s wealthiest private investors are planning to put more money into alternative investments over the next three years, a report says.
The study said the global rich are increasingly attracted by private equity schemes and hedge funds as they offer more stable returns than shares.
Its findings come after recent global stock market volatility.
The report by Barclays Wealth questioned 790 wealthy individuals from around the world.
It found that only 48% of respondents planned to buy further investments in stocks over the next three years, down from 64% over the past 36 months.
This comes following recent turbulence on the worldwide stock markets, sparked by record loan defaults in the US sub-prime mortgage market and a resulting shortfall in global credit.
By contrast, 15% of respondents said they planned to invest in private equity funds, up from 11% over the past three years; while 21% said they expected to invest in hedge funds, up from 20%.
The report added that despite the increase in popularity of such alternative investments, just 27% of respondents said they understood how hedge funds worked, while only 36% said they knew how private equity schemes operated.
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