The uber-wealthy population, specifically centimillionaires with a net worth of over $100 million, set themselves apart with their investment strategies. These individuals, totaling around 28,420 globally and concentrated in major cities like New York City, the Bay Area, Los Angeles, London, and Beijing, have a different outlook on investing compared to the average investor. They focus on preserving their wealth and legacy, gravitating towards stable real estate assets rather than publicly traded equities or cryptocurrencies. This selective approach reflects their desire for long-term wealth preservation rather than quick gains.
Real estate plays a significant role in the portfolios of centimillionaires, with Class A properties being a popular choice among these ultra-wealthy individuals. These “trophy assets” provide a stable investment option that aligns with their goal of preserving wealth and legacy. According to Michael Sonnenfeldt, founder of Tiger 21, real estate investments typically make up 27% of these individuals’ portfolios. This focus on real estate underscores the importance of tangible assets in their overall investment strategy.
Family offices serve as the primary investment vehicles for centimillionaires, managing all aspects of their wealth from inheritance to household expenses. These family offices often have foundation arms for charitable giving, as well as venture capital arms that invest in high-growth startups. The number of family offices worldwide has tripled since 2019, with over 4,500 offices managing an estimated $6 trillion in assets. This structured approach allows ultra-wealthy individuals to effectively manage and grow their wealth in a comprehensive manner.
In addition to real estate and family offices, centimillionaires also explore alternative investments such as buying stakes in professional sports teams. This exclusive and insular world appeals to these wealthy individuals as they seek to socialize with peers of similar status. Owning a sports team is seen as a way to solidify their status and gain recognition within their social circles. This demonstrates the diverse range of investments that centimillionaires consider, highlighting their willingness to explore unconventional avenues for wealth growth.
According to Salvatore Buscemi of Dandrew Partners, centimillionaires pay special attention to fixed income, private credit, and alternative investments like venture capital and private equity. Private credit, in particular, is gaining traction among these individuals as they seek sources of yield outside of traditional markets. This trend reflects a growing appetite for unique risk-return profiles that alternative investments offer. The ability to diversify their portfolios with non-traditional assets allows centimillionaires to further protect and grow their wealth in a constantly changing market environment.
