Historically, HNW investors have allocated around 50% of their assets to stocks, 20% to bonds, 25% to alternatives and 5% to cash, global investment firm KKR noted in 2021. However, Diamond said alternatives have begun to claim more of the UHNW portfolio in the past 10 to 15 years. UHNW investors have allocated around 30% to stocks, 10% to bonds, 50% to alternatives and 10% to cash, according to KKR. UHNW investors now show a significant lean towards alternatives, especially in private equity and real estate. Younger, wealthy investors, often with unique wealth creation stories, are increasingly drawn to nontraditional investments.

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Real estate has seen an uptick in interest from wealthy investors. Wealthy investors have always been attracted to real property, but in the past generation real estate and development have claimed a greater share of their portfolios. Private equity real estate assets have achieved a 10% compounded annual growth rate over the past decade, Bain Capital’s 2023 Global Private Equity Report noted. Institutions may have reduced their real estate investments recently, but private equity investors have been less defensive, maintaining a strong presence in the market.

Economic uncertainties often reshape investment patterns. Despite a general slowdown, high-net-worth investors continue to dominate the commercial property investment landscape. Our research at Freedom Venture Investments echoes this resilience, showing that real estate remains a robust option even during downturns.

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