The ultra-wealthy, defined as individuals with a net worth of over $100 million, make up a small exclusive group known as centimillionaires, with approximately 28,420 individuals globally. These individuals are often concentrated in major cities such as New York City, the Bay Area, Los Angeles, London and Beijing, which offer robust financial infrastructure and lucrative real estate markets. Unlike the average investor, centimillionaires have unique investing strategies that prioritize wealth preservation and legacy building over quick gains. They typically avoid publicly traded equities and cryptocurrencies in favor of stable real estate assets.
Real estate investments play a significant role in the portfolios of centimillionaires, often comprising 27% of their overall holdings. These wealthy individuals tend to focus on high-quality, Class A properties that are considered “trophy assets.” Family offices, which handle a wide range of financial matters including investments, charitable giving, and estate planning, are commonly utilized as investment vehicles by centimillionaires. The number of family offices has increased significantly in recent years, with over 4,500 worldwide managing an estimated $6 trillion in assets.
In addition to real estate, centimillionaires also explore alternative investments such as professional sports teams. Owning a stake in a sports team provides exclusivity and status, allowing wealthy individuals to mingle with peers of similar wealth. This type of investment is considered prestigious and can help legitimize one’s social standing. Furthermore, high net worth individuals are increasingly turning to fixed income, private credit, and alternative investments for yield generation outside of traditional markets. Private credit, venture capital, private equity, and real assets are among the alternative investment options favored by centimillionaires.
Overall, the investing strategies of centimillionaires reflect their desire to preserve and grow their wealth while maintaining a certain level of exclusivity and status. These individuals prioritize long-term financial stability and are selective in their investment choices, focusing on assets that offer steady returns and strong growth potential. This approach sets them apart from the average investor and underscores the importance of tailored wealth management strategies for ultra-high net worth individuals.
