Surveys
Wealthy Investors Report Big Gains For 2009, But Concerns Remain: IPI Survey
The Institute for Private Investors' annual members survey revealed sizable portfolio returns, but concerns about liquidity and hedge funds.
Wealthy investors had a lucrative year in 2009, but had redemption issues with hedge funds and remained concerned about liquidity, according to a survey by the Institute for Private Investors.
IPI members reported a 17.27 per cent average return for 2009, according to the organization’s Family Performance Tracking survey, a stark contrast to 2008, when most members reported negative returns.
However, six out of ten survey respondents reported problems redeeming money from a hedge fund last year.
Nearly three-quarters of that group said they were unlikely to invest with the same hedge fund manager again. Only 28 per cent said they would consider, or already are, reinvesting.
Nonetheless, just 13 per cent of all respondents said they were disappointed in the performance of their funds, while 85 per cent were relatively satisfied, and 41 per cent said performance exceeded their expectations.
According to IPI, 80 per cent of its member families oversee more than $500 million. Twenty-seven per cent of the member families took part in the survey and reported that their average cash allocation dropped from 17 per cent in 2008 to 8 per cent last year.
Survey respondents shifted their assets into commodities (3 per cent, up from 1 per cent in 2008) and global long-only equity (11 per cent compared to 7 per cent in 2008). Municipals also saw a modest increase from 10 per cent to 13 per cent.
Despite moving out of cash, IPI investors said they are holding a higher than typical allocation to fixed income (19 per cent), and increased their long only global equity allocations (from 7 per cent to 11 per cent).
Those findings underscore IPI members' “focus on liquidity,” said Kristi Kuechler, president of the organization, which has over 1,100 members.
“Members are moving away from complexity, but there is not a wholesale abandonment of portfolio strategies from the past,” Kuechler said.
