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Alternative Market Briefing

Knight Frank/Citi`s 2009 Wealth report unveils substantial shift in asset distribution among HNWIs: `virtually all moved away from hedge funds`

Tuesday, April 14, 2009

The 2009 edition of The Wealth Report, the third such collaboration between Knight Frank and Citi Private Bank, indicates that luxury house prices have fallen around the world, but super-rich appetite for property remains undimmed.

There has already been a substantial shift in asset distribution among the rich, who appear to have taken decisive action to mitigate risk and protect their wealth (see bar chart on page 14).

Although the creation of fortunes is often associated with risk and daring decisions, safety first seems to be the mantra in times of economic turbulence, with both transparency and stability highly valued.

Based on this survey, almost 90% of HNWIs have either decreased or substantially decreased their exposure to equities, while virtually all have moved away from hedge funds. A small proportion, 7%, feels confident enough to have increased their exposure to equities.

Bank accounts have been the biggest beneficiary from the flight away from stock market volatility –almost 60% of those represented by our survey have substantially increased the amount they have on deposit. The perceived safety of the bond markets is reflected by the fact that 67.8% of respondents have increased their exposure to this kind of investment.

But uncertainty about the ability of even national governments to repay increasing levels of debt could explain why 14.3% of people have decided to reduce their exposure to bonds.

When looking at bricks and mo......................

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