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Spectrem Group Report Shows Hedge Fund and Other Alternative Investments Increase With Wealth

CHICAGO, IL--(Marketwired - Dec 3, 2014) - Wealthy investors continue to invest in hedge funds as an alternative to the stock market, seeking greater return on investment while shielding their portfolios against the volatile nature of stocks and bonds trading.

Spectrem Group's latest Perspective report -- Use of Hedge Funds and Private Equity in the Portfolios of the Wealthy -- examines the ownership and sourcing of hedge fund investments, as well as the use of private equity in investing. The report concentrates on investors with a net worth over $5 million.

The Perspective includes key findings about hedge fund and alternative investments, including:

  • The average investment for the $25 million investor ranges from $3.5 million for private placements to $12.6 million for hedge funds.
  • Ownership of alternatives increases with an increase in wealth and decreases with increasing age.
  • Hedge funds receive more money from alternative investors than any other class of alternatives, particularly from those with a net worth of $25 million or more.
  • While 42 percent of investors with a net worth over $25 million own hedge funds, 69 percent of investors with a net worth of $125 million or more are invested in hedge funds.

"Utilization of alternative investments increases as wealth increases, and advisors should recognize the opportunity to introduce alternative investments as an investor's net worth grows," says George H. Walper, Jr., president of Spectrem Group. "Investors who find alternatives attractive are looking for a higher rate of return and a diversified portfolio of investments."

Additional insights on Spectrem's hedge funds and private equity Perspective can be found at Spectrem.com and Spectrem's Millionaire Corner, including:

About Spectrem Group: Spectrem Group (www.spectrem.com) strategically analyzes its ongoing primary research with investors to assist financial providers and advisors in understanding the Voice of the Investor.

About Millionaire Corner: Spectrem's Millionaire Corner website (www.millionairecorner.com) provides information for investors about investors. With its Best Financial Advisors service, investors are able to search for financial and investment advisors to assist in growing their wealth.