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Alternative Market Briefing

Expected 7.7% growth in high net worth individuals through 2012 may indicate a need to increase fundraising attention on this population

Friday, June 27, 2008

Kirsten Bischoff, Opalesque New York: According to the 2008 Merrill Lynch/Capgemini Wealth Report (Source) there are now 10.1 million individuals worth at least US$1m. The report also projects high net worth individual (HNWI) wealth, which currently stands at $40tln will increase at an even faster pace over the next four years, estimating a growth rate of +7.7% per year and representing $59tln by 2012.

However, during the past few years the hedge fund industry has shifted its fundraising focus off high net worth individuals and looked increasingly to institutional investors for its base of funding. As Opalesque reports of worries over a potential June 30th watershed in hedge fund redemptions (Source) the Merrill Lynch/Capgemini Wealth Report may provide some support to a return in courting the high net worth investor population.

Wealth management advisors may also feel the pressure of catering to the growing sophistication of the HNWI population. The Merrill Lynch/Capgemini report indicates that those firms who advise HNWI will need to adapt institutional capabilities "to offer clients more comprehensive asset allocation, rebalancing, and portfolio oversight." Perhaps one indication of this adaptat......................

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