Finance

Here’s where the world’s top 0.001% are putting their money, according to wealth experts

Published

7 months ago

April 22, 2024

Yana Iskayeva | Moment | Getty Images

The uber wealthy live a world apart and their investing strategies also look vastly different from the average investor’s portfolio.

“While there is no official threshold, centimillionaires or individuals with a total net worth of over $100 million, is a good benchmark as entry into the 0.001% club,” said Kevin Teng, CEO of WRISE Wealth Management Singapore, a wealth enterprise for ultra-high net worth individuals.

Globally, the population of centimillionaires stands at around 28,420 individuals, and are largely concentrated in New York City, the Bay Area, Los Angeles, London and Beijing, according to data from WRISE.

They bestow knighthood on you in the United States when you buy an NFL team.

Salvatore Buscemi

CEO of Dandrew Partners

“These cities boast robust financial infrastructure, vibrant entrepreneurial ecosystems, and lucrative real estate markets, making them attractive destinations for the ultra-wealthy?,” Teng told CNBC.

And this demographic that “epitomizes extreme wealth” is selective when it comes to investments, Teng said.

“They don’t invest in get rich, quick things, illiquid things today. For example, that means they don’t really do publicly traded equities,” said Salvatore Buscemi, CEO of Dandrew Partners, a private family investment office.

“They actually don’t even invest in crypto, believe it or not,” Buscemi told CNBC via Zoom. “What they’re looking for is to preserve their legacy and their wealth.”

1. Real estate

As a result, centimillionaire portfolios often feature “very strong, stable pieces of real estate,” Buscemi said. These wealthy individuals gravitate toward “trophy asset” Class A properties, or investment-grade assets that typically were built within the last 15 years.

Michael Sonnenfeldt, founder and chairman of Tiger 21 — a network of ultra-high net worth entrepreneurs and investors — told CNBC that real estate investments typically represent 27% of these individuals’ portfolios.

2. Family offices as investment vehicles

Individuals of such wealth generally have their money managed by single family offices, which handle everything including their inheritance, household bills, credit cards, immediate family expenses, etc., said Andrew Amoils, an analyst at global wealth intelligence firm New World Wealth.

“These family offices often have foundation arms for charities and venture capital arms that invest in high growth startups,” said Amoils.

The number of family offices in the world has tripled since 2019, topping 4,500 worldwide last year with an estimated $6 trillion in assets under management combined.

3. Alternative investments?

Ultra high net worth individuals also explore potentially buying stakes in professional sports teams, said Dandrew’s Buscemi.

“That’s a very, very insulated group to get into and requires a lot more than just money,” he said.

The exclusivity is a major appeal as these wealthy individuals want to mingle with people of similar status, Buscemi explained. Owning a stake in a sports team is a way for these individuals to legitimize their status, he said.

Owner Jerry Jones of the Dallas Cowboys welcomes fans to training camp at River Ridge Complex on July 24, 2021 in Oxnard, California.

Jayne Kamin-Oncea | Getty Images Sport | Getty Images

“They bestow knighthood on you in the United States when you buy an NFL team,” he said, like how American businessman and billionaire Jerry Jones bought the Dallas Cowboys in 1989.

WRISE’s Teng also noted that 0.001% individuals pay more attention to fixed income, private credit and alternative investments. He said private credit is gaining traction as investors seek sources of yield outside of conventional markets.

“This trend reflects a growing appetite for non-traditional assets that offer unique risk-return profiles,” said Teng, noting that alternative investments include venture capital, private equity and real assets.

Finance

Elon Musk endorses Trump’s transition co-chair Howard Lutnick for Treasury secretary

Published

4 hours ago

November 16, 2024

Business Finance News

Elon Musk at the tenth Breakthrough Prize ceremony held at the Academy Museum of Motion Pictures on April 13, 2024 in Los Angeles, California.

The Hollywood Reporter | The Hollywood Reporter | Getty Images

On Saturday, Elon Musk shared who he is endorsing for Treasury secretary on X, a cabinet position President-elect Donald Trump has yet to announce his preference to fill.

Musk wrote that Howard Lutnick, Trump-Vance transition co-chair and CEO and chairman of Cantor Fitzgerald, BGC Group and Newmark Group chairman, will “actually enact change.”

Lutnick and Key Square Group founder and CEO Scott Bessent are reportedly top picks to run the Treasury Department.

Musk, CEO of Tesla and SpaceX, also included his thoughts on Bessent in his post on X.

“My view fwiw is that Bessent is a business-as-usual choice,” he wrote.

“Business-as-usual is driving America bankrupt so we need change one way or another,” he added.

Musk also stated it would be “interesting to hear more people weigh in on this for @realDonaldTrump to consider feedback.”

Howard Lutnick, chairman and chief executive officer of Cantor Fitzgerald LP, left, and Elon Musk, chief executive officer of Tesla Inc., during a campaign event with former US President Donald Trump, not pictured, at Madison Square Garden in New York, US, on Sunday, Oct. 27, 2024.

Bloomberg | Bloomberg | Getty Images

In a statement to Politico, Trump transition spokesperson Karoline Leavitt made it clear that the president-elect has not made any decisions regarding the position of Treasury secretary.

“President-elect Trump is making decisions on who will serve in his second administration,” Leavitt said in a statement. “Those decisions will be announced when they are made.”

Both Lutnick and Bessent have close ties to Trump. Lutnick and Trump have known each other for decades, and the CEO has even hosted a fundraiser for the president-elect.

The Wall Street Journal also reported that Lutnick has already been helping Trump review candidates for cabinet positions in his administration.

On the other hand, Bessent was a key economic advisor to the president-elect during his 2024 campaign. Bessent also received an endorsement from Republican Senator Lindsey Graham of South Carolina, according to Semafor.

“He’s from South Carolina, I know him well, he’s highly qualified,” Graham said.

Finance

Protecting your portfolio against risks tied to Trump’s tariff plan

Published

9 hours ago

November 16, 2024

Business Finance News

Biggest Risks After the Rally: Trade & Top Valuations

Money manager John Davi is positioning for challenges tied to President-elect Donald Trump’s tariff agenda.

Davi said he worries the new administration’s policies could be “very inflationary,” so he thinks it is important to choose investments carefully.

“Small-cap industrials make more sense than large-cap industrials,” the Astoria Portfolio Advisors CEO told CNBC’s “ETF Edge” this week.

Davi, who is also the firm’s chief investment officer, expects the red sweep will help push a pro-growth, pro-domestic policy agenda forward that will benefit small caps.

It appears Wall Street agrees so far. Since the presidential election, the Russell 2000 index, which tracks small-cap stocks, is up around 4% as of Friday’s close.

Davi, whose firm has $1.9 billion in assets under management, also likes staying domestic despite the tariff risks.

“We’re overweight the U.S. I think that’s the right playbook in the next few years until the midterms,” added Davi. “We have two years of where he [Trump] can control a lot of the narrative.”

But Davi plans to stay away from fixed income due to challenges tied to the growing budget deficit.

“Be careful if you own bonds for sure,” said Davi.

Since the election, the benchmark 10-year Treasury yield is up 3% as of Friday’s close.