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- ๐ง How $20M+ entrepreneurs invest their money
๐ง How $20M+ entrepreneurs invest their money
Tiger21's $135B assets, portfolio breakdown, investing lessons
This group of ultra high-net-worth entrepreneursย shares their exact asset allocation.ย Imagine that?
Today in 10 minutes or less, youโll learn:
๐ฏ What is Tiger21
๐ฏ Who are its members
๐ Member asset allocations
๐ก Lessons and takeaways
๐ฏ Tiger 21: Asset allocation of ultra-high-net-worth entrepreneurs
๐คย What is Tiger21?
Exclusive peer membership network for high-net-worth entrepreneurs and investors with >$20M net worth.
The company is inspired by other mastermind groups (YPO, Vistage), but focuses on the unique personal finance challenges that arise after entrepreneurs exit their business.
Tiger21 has 1,100ย members worth ~$135B in personal assets.
๐ฏย Who are Tiger21 members?
Age: on average, early 50โs; most new members are 30โs and 40โs
Industries: range from traditional industries (finance/real estate) to Internet companies
Financial stage: Shifting from wealth accumulation to wealth preservation goals
Roles: Founders exiting their business, investors, or executives
Wealth: >$20M in liquid assets
๐ Member asset allocation in Q4 2022
๐๏ธ Private equity and real estate allocations make up >50%: Private equity recently increased to an all-time-high at 31%, surpassing real estate. However, 70% of members are still looking for new opportunities in real estate for 2023.
80% of PE allocation are direct investments, while 20% are fund commitments (entails capital calls)
Historically real estate has been king. Not primary residence, but investment property (LP in a fund, buy property directly, REIT)
Tiger21 members carefully manage their liquidity. Many still keep a high allocation in other more-liquid asset classes (cash, public equity) โ partly due to past mistakes. For example, in the 2008 recession, many found themselves strapped for liquidity and unable to honor capital commitments.
๐ย Public equity allocation declined to 24%: This mirrored the decline in public equity indices, which likely accounted for most of the change (vs people taking money out of public equities).
๐ธย Cash allocation declined from ~12% to 10%: Signals theyโre more comfortable with long-term investments
๐ชย Hedge fund declined to only 2%: Interesting to see the decline of hedge funds as a priority within portfolios
๐งโ๐ปย 40% of members want to invest in tech: Recent economic news hasnโt put off the wealthy completely from making investments
๐ก Lessons and takeaways
Consolidate accounts helps to streamline investments and potentially cut fees: Getting a consolidated view of your assets, liabilities, and equity helps you create a clearer picture. (also makes setting up automations easier)
Keep cash on hand: Tiger21 members have a large cash pile (10%), which gives them optionality and speed. They can move quickly to invest in time-sensitive opportunities. Plus, not be forced to sell in a drawdown.
Check on blind spots with your peers: Tiger21 members have to do a โPortfolio Defense,โ a 1.5 hour session where they present their entire portfolio, asset allocation, and why they make certain investments. For example, one member discovered a blind spot in his estate planning & charitable giving.
Great entrepreneur =/= great investor: Entrepreneurs typically become successful by intense focus in a narrow domain and active management, while investing requires more diversification and relying on expertise of others. Michael Sonnenfeldt, founder, said it takes 5 years on average for Tiger21 entrepreneurs to become great investors.
Wealth preservation requires diversification: Tiger21 members not only allocate to public equities, but also diversify with real estate, private equity, and even cash.
90% of members surveyed expect a recession lasting 6+ months: Yet they believe recessions still present opportunities to invest.
๐๏ธ Further reading
Learn from 8-figure entrepreneurs. At Money Abroad, we enjoy the My First Million podcast hosted by Sam Parr, co-founder of The Hustle (sold for $30M), and Shaan Puri, CEO of Milk Road & Bebo (sold for $25M).
Our friends publish the My First Million Newsletter, which sends weekly write-ups and analysis of the podcast to your inbox. Sign up here!
๐ย Beyond your borders
๐ธ๐ฌย Singapore raises property Additional Buyer Stamp Duty for foreigners from 30% to 60%, in an effort to cool property market (CFI)
๐ธ๐ฌ Foreign patients flocking to Singapore for medical services, rebounded back to pre-Covid volumes (ST)
๐ฌ๐ท Searches for Greek Golden Visas jumped 75% in the past month (GCT)
๐ฆ๐บย Australia raises minimum income required for skilled worker visa from AUD $53.9k to $70k (AP)
๐บ๐ธ Multiple US tech companies reportedly colluded to cheat H-1B visa lottery (WSJ)
๐ณ๏ธย Overseas ballot
Here are the results from last weekโs poll:
Do you use a financial advisor?
โข 29% Yes, I have a commission-based advisor ๐ฏ
โข 0% Yes, I have a fee-only advisor ๐ต
โข 71% No, I manage my own finances โ
Most voters preferred to run their own show. ๐ชย
Here is this weekโs poll:
What would be most helpful to read next week? |
Thatโs all for today!
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