The uber wealthy live in a world apart, with investing strategies that set them apart from the average investor. According to Kevin Teng, CEO of WRISE Wealth Management Singapore, individuals with a total net worth of over $100 million are considered part of the 0.001% club of centimillionaires. Globally, there are around 28,420 centimillionaires, and they are mainly concentrated in cities like New York City, the Bay Area, Los Angeles, London, and Beijing. These cities offer robust financial infrastructure, vibrant entrepreneurial ecosystems, and lucrative real estate markets, making them attractive destinations for the ultra-wealthy.
Centimillionaires are selective when it comes to investments. According to Teng, they avoid investing in get-rich-quick schemes and illiquid assets. Salvatore Buscemi, CEO of Dandrew Partners, noted that they do not invest in publicly traded equities or cryptocurrencies. Instead, centimillionaires focus on preserving their legacy and wealth. As a result, their portfolios often consist of very strong, stable pieces of real estate, particularly Class A properties built within the last 15 years. Real estate investments typically make up 27% of their portfolios, according to Michael Sonnenfeldt, founder and chairman of Tiger 21.
Centimillionaires often have their money managed by single family offices, which oversee everything from inheritance to household bills and investments. These family offices may also have foundation arms for charities and venture capital arms for high-growth startups. The number of family offices worldwide has tripled since 2019, reaching over 4,500 with an estimated $6 trillion in assets under management.
Ultra-high net worth individuals also consider buying stakes in professional sports teams as a way to legitimize their status. Owning a stake in a sports team provides exclusivity and allows them to mingle with people of similar status. According to Buscemi, buying an NFL team in the United States is akin to being bestowed knighthood, as seen with billionaire Jerry Jones purchasing the Dallas Cowboys in 1989.
Centimillionaires pay close attention to fixed income, private credit, and alternative investments. Teng highlighted the growing interest in private credit as investors seek sources of yield outside of traditional markets. This trend reflects a desire for non-traditional assets that offer unique risk-return profiles. Alternative investments may include venture capital, private equity, and real assets, providing centimillionaires with a diversified investment portfolio.
The investing strategies of centimillionaires differ significantly from those of the average investor. These ultra-wealthy individuals prioritize preserving their wealth and legacy through strategic investments in real estate, private credit, and alternative assets. By leveraging family offices and exploring unique investment opportunities like buying stakes in sports teams, centimillionaires are able to maintain and grow their wealth while solidifying their status among the elite.