In the world of the uber-wealthy, investing strategies differ greatly from the average investor. Centimillionaires, those with a net worth of over $100 million, have a distinctive approach to managing their wealth. This elite group, numbering around 28,420 globally, is primarily concentrated in major financial hubs such as New York City, the Bay Area, Los Angeles, London, and Beijing.
Unlike the general public, centimillionaires are not attracted to traditional investment options. Salvatore Buscemi, CEO of Dandrew Partners, points out that they avoid publicly traded equities and even cryptocurrencies. Instead, their focus lies on preserving their legacy and wealth over time. This leads them to invest in stable real estate assets, particularly Class A properties that have been developed within the last 15 years. Real estate often makes up a significant portion of their investment portfolios, as Michael Sonnenfeldt, founder of Tiger 21, notes that it can represent up to 27% of their holdings.
Family Office Management
Centimillionaires typically entrust their financial affairs to single family offices, which handle all aspects of their wealth management. These offices oversee everything from inheritance to daily expenses, ensuring that the individuals’ financial affairs are well taken care of. Moreover, family offices often have branches dedicated to charitable initiatives and venture capital investments in high-growth startups. The prominence of family offices has witnessed a significant rise in recent years, with over 4,500 such offices globally managing an estimated $6 trillion in assets.
Ventures into Sports Investments
Apart from real estate, ultra-high net worth individuals explore opportunities to invest in professional sports teams. Buscemi highlights that owning a stake in a sports franchise is a sought-after status symbol within this exclusive circle. The allure of mingling with like-minded affluent individuals in this arena is a major draw for these wealthy investors. Buying a stake in a sports team is seen as a way to cement their social status, akin to receiving knighthood in the United States. This exclusivity is exemplified by figures like Jerry Jones, who purchased the Dallas Cowboys in 1989, solidifying his place in the elite club.
In addition to real estate and sports investments, the ultra-wealthy are increasingly turning to alternative asset classes. Kevin Teng of WRISE Wealth Management Singapore highlights the growing interest in fixed income, private credit, and alternative investments among centimillionaires. Private credit, in particular, is gaining traction as investors seek unconventional sources of yield beyond traditional markets. Venture capital, private equity, and real assets are among the alternative investment options favored by this demographic, reflecting their appetite for unique risk-return profiles.
The elite investing strategies of centimillionaires are a world apart from conventional investment practices. With a keen focus on legacy preservation, a penchant for high-value real estate, and a growing interest in alternative assets, the ultra-wealthy navigate the investment landscape with a distinct approach that sets them apart from average investors. Their affinity for exclusivity and status symbols further underlines the unique investment mindset of this prestigious group.