As increasing numbers of affluent individuals amass wealth worth millions of dollars, the private equity sector is endeavoring to secure a significant stake in the substantial funds that these mini-millionaires possess. This push expands the traditional ambit of private equity as an investment avenue typically reserved for the ultra-rich and major institutional investors.
Ever since a high-profile event held in September at Avra Madison Estiatorio, an upscale Greek eatery in Manhattan, it has been evident that the industry seeks to engage the rising suburban rich more dynamically. This gathering, organized by alternative investment colossus Ares Management Corp., had the particular appeal of an appearance by tennis legend John McEnroe.
The event, which also involved a visit to Arthur Ashe Stadium in Queens to watch the U.S. Open Quarterfinals, reflected the industry’s strategic shift towards communication with financial advisors. This outreach is crucial in shaping the investment decisions of these newly-minted millionaires across the United States.
The primary objective behind this shift in approach is the potential windfall accessible in the massive pool of wealth held by these affluent individuals. Reports suggest that ultra-high net worth individuals possessed a staggering $10.2 trillion in liquid fortunes by the end of 2020.
To attract such potential investors who are increasingly looking at alternative investment opportunities to traditional stocks and bonds, the private equity sector is now making concerted efforts to extend its reach, revealing a novel development in the industry.
This summary is based on an article by Allison McNeely, Dawn Lim, and Loukia Gyftopoulou, originally published on Bloomberg Law on November 7, 2023.