World’s richest families invest more in private equity amid volatile markets – UBS

LONDON, June 8 (Reuters) – The world’s wealthiest households set a lot more income into non-public fairness than in classic asset lessons like mounted cash flow and stocks in 2021 as they sought to increase financial investment returns, an annual report by Swiss bank UBS (UBSG.S) exhibits.

Private equity posted stellar returns final year as trillions of pounds in pandemic-relevant stimulus prompted a file surge in offer-generating with over-all offer benefit in 2021 doubling from earlier years, according to industry estimates.

In distinction, fixed cash flow faced a torrid calendar year as in close proximity to zero interest rates sapped its attractiveness as a safe and sound haven all through marketplace turmoil while sky-high valuations in volatile fairness markets deterred investors.

Investments into personal equity by the world’s wealthiest households, elevated continuously involving 2019 and 2021, in accordance to a study for the UBS report of 221 family members workplaces overseeing $493 billion in belongings.

Immediate allocations as a proportion of their total investments rose to 13% in 2021 from 10% the prior yr although indirect allocations were being 8% last yr versus 7%.

In the meantime, set money investments declined by two percentage factors in 2021 to 11% from the prior year while equity investments were continuous about 24%. Even serious estate investments, a conventional favourite, slipped to 12% very last calendar year from 13% in 2020.

UBS’ wealth management arm manages more than $3 trillion in belongings. It has famously mentioned it banks much more than 50 % the world’s billionaires.

The report is widely watched by the financial investment local community as it shines a light into the investing behaviors of these billionaire investors.

About 63% of the household places of work surveyed said they no for a longer time felt substantial-quality fastened income aided diversify their over-all portfolio chance. A majority also had been relying on energetic manager tactics instead than having the passive route.

About 81% of the spouse and children places of work surveyed experienced invested almost 3% into cryptocurrencies, principally to discover about the engineering and produce improved expense returns.

Reporting by Saikat Chatterjee, further reporting by Brenna Hughes Neghaiwi Enhancing by Emelia Sithole-Matarise

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