Super rich still making money in crisis

Print

Super rich get richerFinancial advisers to the world's richest people report some of their top clients have continued to make money throughout recent market turmoil by harnessing sophisticated investments out of reach to mainstream punters.

With equity markets plunging, most investors have suffered losses to their pension funds and portfolios, but those able to meet the multi-million dollar investment thresholds of private equity and some hedge funds are coming out ahead.

"You've got so many investment opportunities that are open only to very rich people," said one London-based financial adviser specialising in ultra rich investors.

"The super rich are doing very well. They're getting good advice, they're getting access to stuff that other people don't have access to," he said.

Certain investment vehicles, such as hedge funds, can thrive at times of market stress because they are able to use risk management tools such as derivatives and make short-selling sales that make money when an asset price falls.

Some big name hedge funds such as Brevan Howard, Man Group's AHL and Winton have continued to make gains for their investors during recent market volatility.

However, because some of the trades made by the funds can involve higher risks, and in the case of short selling theoretically infinite potential losses, regulators often place them off limits to small investors.

More...