NEW YORK, April 28, 2010 (GLOBE NEWSWIRE) -- In the spring of every year, the Institute for Private Investors asks its wealthy members how their portfolios performed during the previous year. This year, more than a quarter (27%) of IPI's 306 member families took part in the 2009 Family Performance Tracking® survey. They reported their portfolios have bounced back, with a 17.27% average return.
In 2008, only three respondents reported positive returns, and allocation to cash was at an all-time high (17%). By the end of 2009, members had just 8% in cash and were putting the rest to work. They had shifted their assets into commodities (3%, up from 1% in 2008) and global long-only equity (to 11% from 7% in 2008). Municipals also saw a modest increase from 10% to 13%.
Despite moving out of cash, IPI investors are holding a higher than typical allocation to fixed income (19%), which may reflect liquidity concerns. Perhaps also relating to liquidity issues, IPI investors increased their long only equity allocations (from 7% to 11%) – all of the increase was in global long only, and not domestic. At the end of 2009, alternatives (hedge funds and/or funds of funds, venture capital, private equity, real estate investments and commodities) comprised just under half (42%) of the average IPI member portfolio.
Since 2000, hedge funds and funds of funds have accounted for about a fifth of IPI investors' portfolios; in 2006, allocations were as high as 24% on average. Last year marked a pull back to 19%. Six out of ten investors reported problems redeeming money from a fund, and of them 72% said they were unlikely to invest with that manager again. Only 28% said they would consider, or already are, reinvesting. Even so, just 13% of respondents said they were disappointed in the performance of their funds, 85% were relatively satisfied, and 41% said performance exceeded their expectations.
About IPI
IPI was founded in 1991 as an educational and networking resource for families with substantial assets and their advisors. Today 1,100 private investors from 17 countries are members, with 80% of the 306 member families overseeing in excess of US$50 million. Membership dues and educational fees are the only source of revenue. IPI makes no formal or informal recommendations of money managers and performs no consulting.
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