The global market for wealthy individuals with over $1m of investable assets rose by 11% in 2006, the biggest rise for seven years, to reach over $37 trillion.
Key developments, according to the new edition of IFSL’s International Private Wealth Management report, have been the continuing recovery in equity markets and growing investment in real estate.
The share of alternative assets – such as hedge funds, private equity and equity derivatives – in the portfolio of wealthy investors halved from 20% to 10% in 2006 as investors moved to take advantage of rising real estate markets. Liquidation of gains in real estate may reduce net investment in real estate this year.
Alternative investments can be readily accessed in London, where hedge funds to the tune of $426 billion are managed, nearly 80% of the European total. Half of the investments in the European private equity market are made in the UK.
Advisers in London provide a range of specialist services to an international clientele. UK residents represent a key segment of the market with the UK being home to 610,000 millionaires – the most of any European country and exceeded only by the US and Japan.