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According to Barrons more than ever, it seems, the rich are
following the dictum of mutual-fund legend Peter Lynch: “Invest in what you
know.” They are increasingly using the industry insights they gleaned while
building businesses to make major private-equity investments, according to a
report from TIGER 21, a network of ultra-high-net-worth individuals who compare
notes on markets and investments.
The 210-member group’s collective allocation to private
equity stood at 19% at the end of 2012, up from 13% a year earlier. It was the
highest level in the five years that TIGER 21 has tracked such figures.
Michael Sonnenfeldt, the group’s founder, calls it a
“dramatic shift.” In the past, Sonnenfeldt says, an economic recovery would
have led to more investing in publicly traded stocks than in private
equity. But this time, allocations to
stocks have grown more modestly—up just three percentage points during 2012, to
24% of the average portfolio. That’s much lower than prerecession levels, a
development Sonnenfeldt attributes to jitters about the stock and bond markets.
of a particular industry allows them “some ability to lever the company’s
assets in a better way…..”
Find out more at http://blogs.barrons.com/penta/2013/01/30/where-the-rich-are-investing-now/?mod=BOLBlog
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