The Liquidity Report:
Alternative Asset Investors, Their Wealth Behaviors and Attitudes
Investors who hold between $5 million and $30 million in alternative assets - mid-to-high net worth (MHNW) investors - are a unique segment that, surprisingly, can be underserved by large investing firms. Often, they are viewed as having too many assets to fit most financial firms' cookie-cutter solutions, but too few assets for the special products that ultra-high net worth individuals and large institutional investors may qualify for.
To help understand the needs of these MHNW investors and their appetite for liquidity for their alternative assets, Ben conducted a survey across seven key markets (Boston, New York, Miami, San Francisco, Los Angeles, Chicago, and the Texas Triangle) as well as the rest of the country. The result is The Liquidity Report: Alternative Asset Investors, their Wealth Behaviors and Attitudes, a unique market analysis designed to help wealth managers, financial advisors, sponsor firms and other intermediaries better understand their MHNW clients' motivations, preferences, and liquidity solution needs.
Gain a Better Understanding of Your Clients
By examining the gaps between the importance of and satisfaction with existing liquidity offerings currently available in the marketplace, the survey revealed four distinct Investor Profiles, some of which you might recognize from your own book of business. The four investor profiles were distinguished by their motivation for seeking liquidity, attitudes toward wealth, and notable behaviors. Investor profiles were further dimensionalized by a variety of demographics.
Control Seekers (24%)
Notable Behavior: As a group, Control Seekers like to be involved in developing their investing strategies but will rely on the expertise of their financial advisors on the most important decisions.
Savvy Savers (25%)
Wealth Attitudes: Proud of the work they put in to achieve their wealth, this group is socially conscious about their position and acknowledge the role luck has played in their success.
Engaged Altruists (23%)
Notable Behavior: Early adopters of new digital tools, this group has a DIY spirit, preferring to do their own research rather than rely on advisors to make financial decisions.
Community Entrepreneurs (27%)
Motivation For Liquidity: While Community Entrepreneurs are motivated to preserve their wealth and provide for future generations, their primary motivation for seeking liquidity is to achieve greater community impact.
Opening Doors to New Investing Opportunities
The Liquidity Report brought a new perspective to one long-held assumption: that significant life events like death or divorce are the primary motivators for seeking liquidity from alternative assets. Instead, over half of the investors surveyed say they seek liquidity to achieve access to specific investing opportunities and to generate longer-term return potential. Because of this opportunity-driven approach, alternatives investors are looking for upside when seeking liquidity from current investments, a point underscored by their preference for preferred equity and common equity, rather than cash.
The MHNW Investor's Lack of Liquidity for Alternatives
More than 82% of survey respondents report that they have tried to seek liquidity from their alternative assets at least once in the past five years. More importantly, the survey also revealed widespread frustration among investors with traditional means of moving out of their illiquid alternative assets. An unfortunate reality of the alternative liquidity space is that it's been traditionally inaccessible to anyone other than large institutional investors and ultra-wealthy individual investors.
At Ben, we have crafted a suite of reliable, ongoing liquidity solutions for investors in alternative assets. Our process seeks to give investors access to hard-earned investment capital, with liquidity provided from our own balance sheet. Contact us today to schedule a consultation with our expert team.
Download the full The Liquidity Report to read more about the attitudes, behaviors and liquidity needs of mid-to-high net worth U.S. alternative asset investors. Contact us today to discuss what Ben's secondary market liquidity solutions could mean for you.