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Featured Advisor

Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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Who are the Millionaires Seeking Alternative Investment Products?

Which Millionaires are more likely to go for alternative investment products? Millionaire Corner research finds common traits among affluent investors who go beyond traditional stocks and bonds. Find out more.

| BY Adriana Reyneri

Alternative investment products appeal to most – but not all – of ultra wealthy investors, according to recent Millionaire Corner research, which finds that Millionaires who invest heavily in alternatives tend to share other traits, as well.

Alternative investment products offer investors choices beyond traditional stock, bond and cash products. Alternatives often offer the potential for high returns, but can also pose a high level of investment risk.  Among other things, alternatives can be less transparent and liquid than publicly traded securities. They can include hedge funds, commodities, real estate and venture capital.

What do millionaires who purchase alternative investment products tend to have in common? Most notably, they look for a high rate of return on their investments, according to our recently published report, $25 Million Plus Investor 2012. The average $25 Million Plus investor with alternatives describes a “good annual rate of return” as 14.5 percent. In comparison, the average $25 Million Plus investor without alternative investment products feels that 8 percent is a good annual return.

Nearly 30 percent of ultra wealthy millionaires with alternatives look for an annual rate of return of 16 percent or higher, a rate beyond the expectations of $25 Million Plus investors without alternatives. Ultra wealthy investors with alternatives are more likely than those without to say it’s important that their investments beat the market, 66 percent vs. 50 percent. They’re less likely to favor protecting principal over growing assets.

 In an apparent contradiction, investors with alternatives express higher levels of concerns about the U.S. economy, inflation, stock market conditions, and oil and gas prices. These elevated concerns appear to drive investors towards alternative investment products. Despite their risk, some alternatives are seen as strategies for hedging against inflation and market volatility.

Ultra wealthy investors who purchase alternative investment products also appear more worried about their personal financial situation, and express significantly higher levels of concern over such issues as maintaining their current financial position, their reputation among colleagues and associates and the legacy they leave for their children.

What are the most popular alternative investments among $25 Million Plus investors? Sixty-three percent purchase private equity for an average investment of $3.4 million. More than half (54 percent) own hedge funds for an average investment of $2.8 million and 51 percent invest an average of $4.4 million in venture capital.