What do the richest people in the world invest in?

Super rich people live in another world, and they investment strategies significantly different from the average investor's portfolio. CNBC told where the richest people in the world invest their money.

“While there is no official threshold, centimillionaires, or people with a total net worth of more than $100 million, are a good benchmark for joining the 0,001%, the club of the extraordinary elite,” said Kevin Teng, CEO of Wrise Wealth Management Singapore, a wealth management company. managing the wealth of ultra-wealthy people.

According to Wrise, there are approximately 28 centimillionaires in the world, mostly concentrated in New York, Los Angeles, London and Beijing.

“These cities boast strong financial infrastructure, vibrant entrepreneurial ecosystems and lucrative real estate markets, making them attractive to the ultra-wealthy,” he said. This demographic, which “represents extreme wealth,” is selective when it comes to investing, he said.

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They do not invest money in “get rich quick” or illiquid projects. They do not engage in public actions.

“They're not actually even investing in cryptocurrencies, believe it or not,” said Salvatore Buscemi, CEO of Dandrew Partners, a private family investment office. “They are committed to preserving their heritage and wealth.”

1. Real estate

According to Buscemi, the portfolios of centimillionaires often contain “very strong, stable properties.” These wealthy individuals gravitate toward Class A “trophy assets,” or investment-grade properties that were typically built within the last 15 years.

Michael Sonnenfeldt, founder and chairman of Tiger 21, a network of ultra-high-net-worth entrepreneurs and investors, said real estate investments typically make up 27% of these individuals' portfolios.

2. Family offices

People with this kind of wealth typically have their money managed by separate family offices that handle everything, including their inheritances, house bills, credit cards, family expenses and more.

“These family offices often have endowment funds and venture capital funds that invest in high-growth startups,” explained Andrew Amoils, a specialist at global wealth management firm New World Wealth.

The number of family offices worldwide has tripled since 2019, reaching 4500 globally last year, with assets under management estimated at $6 trillion.

3. Alternative investments

According to Buscemi, wealthy people are considering buying stakes in professional sports teams, among other things.

“This is a very, very isolated group. To get into it, it takes a lot more than just money,” he emphasized.

Exclusivity, Buscemi says, is a major attraction because the rich want to associate with people of similar status. For such people, owning a share in a sports team is a way to legitimize their status.

“In the United States, when you buy an NFL team, you get a knighthood,” he elaborated. For example, how American businessman and billionaire Jerry Jones bought the Dallas Cowboys in 1989.

Teng argues that these people are focusing more on fixed income investments, private credit and alternative investments. Private lending is gaining momentum as investors look outside conventional markets for sources of yield, he said.

“This trend reflects a growing appetite for non-traditional assets that offer unique risk and return profiles,” Teng concluded, noting that alternative investments include venture capital, private equity and real assets.