These superrich investors just raised cash to record levels to hedge against ‘the greatest period of unknown’


The ultrawealthy, understandably, would like to stay that way.

And so, in an effort to do just that, Tiger 21, a group 800+ investors averaging more than $100 million in assets each, says they’re sitting on a record cash pile representing 19% of their holdings. That’s a spike from the 12% level, where that figure has been for the past few quarters.

“Members are deeply concerned about the gap between Wall Street and Main Street and are therefore acting defensively to keep cash balances high,” Tiger 21 Chairman Michael Sonnenfeldt said. “While members are conservatively positioned, as experienced entrepreneurs, they are also preparing to pounce on opportunities wherever they are. Having cash is the asymmetry of having protection on the downside but waiting for opportunities on the upside.”

Part of the fear that’s brewing among the deep-pocketed set is that the clouds of uncertainty — coronavirus, the November election, civil unrest in some U.S. states, geopolitical tensions, etc. — will continue to hang over this market for a while. In fact, almost half of Tiger 21’s membership said they expect that the country won’t return to any sense of normalcy until summer of next year.

“We are in the greatest period of unknown as they perceive it,” Sonnenfeldt said. “They want to be able to weather the storm for longer — but what they’re really doing is taking risky assets off the table. They are still open for business but the bar for investing is much higher.”

While cash continues to have an increasing presence, real estate remains the largest class investment at 27% of their overall portfolios. Publicly traded stocks come in around 22%, while fixed income represents 8% of the pie, the lowest level in a decade.

Meanwhile, the stock market just keeps churning out gains, with major indexes bouncing around record highs. The Dow Jones Industrial Average

, S&P 500

and Nasdaq Composite

were all moving higher in Wednesday’s session.

Source : MTV