Super-rich bet on EMs, agriculture and private equity

Private jetUltra-high-net-worth (UHNW) individuals and their advisers in the UK are betting on equities, in particular emerging market equities, followed by agriculture and private equity to be

the best performing asset classes between now and 2043, according to a survey.

While the shift away from bonds to equities has been a theme for some time, dubbed the “great rotation”, investors are increasingly turning to alternative asset classes too, as they seek to diversify their wealth.

Multi-family office Fleming Family & Partners says until 2043, British adults will hand down as much as £5 trillion (€5.9 trillion) to the next generation.

Those surveyed say equities – led by emerging market equities, favoured by 27% of respondents – agriculture, and private equities are expected to be the best performing asset classes, while cash and government bonds are forecast to do least well.

Diversification emerged as a key theme from the survey, with the firm saying that 55% consider real estate the most suitable alternative asset class. London prime real estate emerged as a favourite. Some 87% also say gold remains an attractive alternative asset class.

Almost three quarters of UHNW individuals and advisers say the greatest challenge is real capital preservation, which is at risk because of a lack of strategic planning, excessive risk taking, disputes, wealth fragmentation, inflation and taxation.

Rising government deficits and social spending obligations are also concerns because they could lead policy-makers to raise taxes from the wealthy. Five percent of respondents say they have become more concerned about “political risk” since the financial crisis of 2008.

“Nevertheless, attitudes to tax and tax planning are changing,” Fleming Family & Partners says in a statement. “Many respondents acknowledge that tax avoidance is not acceptable, a result perhaps of the well-publicised political and media backlash against it.”

Fleming Family & Partners surveyed 90 UHNW individuals and advisers in the UK.

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