The Investment Portfolios of the Global Rich

We'd like to introduce a great article about the global rich that recently appeared in Hankyung Business, a magazine published by The Korea Economic Daily.
It is about how the global rich structure their investment portfolios.

Reduce cash, but prefer bonds and alternative investments over stocks.
That sums up the investment strategy of the global rich in 2024 in one sentence.
According to the 2024 World Wealth Report published by French global consulting firm Capgemini, the investment portfolios of the rich with net assets of USD 10 billion or more are showing major changes.

[Changes in Asset Allocation of the Global Rich]
Cash and cash equivalents: 34% → 25% (9%p ↓)
Bonds and fixed income: 15% → 20% (5%p ↑)
Real estate: 15% → 19% (4%p ↑)
Alternative assets: 13% → 15% (2%p ↑)
Stocks: 23% → 21% (2%p ↓)

Particularly noteworthy is the sharp decline in cash holdings. The share of cash and cash equivalents, which stood at 34% in January 2023, fell by as much as 9 percentage points to 25% in January 2024. Instead, the shares of bonds, real estate, and alternative assets such as private equity funds increased.

[Key Investment Targets] - Private equity and hedge funds
- AI and machine learning startups
- Fintech and health-tech companies
- Clean tech and space technology
- Blockchain and cryptocurrency

In particular, private equity funds are emerging as a new investment alternative for the rich. According to the Capgemini report, two out of three wealthy individuals said they plan to increase their private equity investments in the future. Reflecting this trend, the performance of large global private equity firms is also on the rise.

[Major Private Equity Firms]
Blackstone
- Assets under management: over USD 1 trillion
- 2024 earnings: USD 23 billion
- Main investment areas: real estate, infrastructure, corporate acquisitions

KKR
- Assets under management: USD 500 billion
- 2024 earnings: USD 18 billion
- Main investment areas: technology, healthcare

Apollo
- Assets under management: USD 400 billion
- 2024 earnings: USD 15 billion
- Main investment areas: credit, real estate, private equity

In fact, these major private equity firms earned more than USD 56 billion in 2024 alone.
According to the Financial Times, not only did the value of the assets held by these firms soar, but several positive factors coincided, including their inclusion in major U.S. stock indices.

[Investment Strategies of Global Legends]
- Warren Buffett (Berkshire Hathaway)
- Cash holdings: USD 325.2 billion (all-time high)
- Bond investments: USD 304 billion
- Stock investments: USD 271.6 billion

Even Warren Buffett, known as the Oracle of investing, is showing a preference for bonds over stocks. Berkshire Hathaway's bond investments of USD 304 billion have surpassed its stock investments of USD 271.6 billion.
This is the first time in 22 years, since the dot-com bubble.
Market experts analyze this shift as "a cautious move wary of excessive optimism in the U.S. stock market."
In fact, in 2024 the S&P 500 recorded a high return of 23% and the Nasdaq 29%, but many experts are mentioning the possibility of a short-term correction.

[2025 Investment Points Global Investors Are Watching]
-Whether inflation persists
- The direction of U.S. interest rate policy
- Growth of the AI industry
- The transition to green energy
- Restructuring of global supply chains

In this way, the global rich pursue balanced investing that seeks stable returns without missing new opportunities.
What stands out in particular is that they actively seek new investment opportunities arising from technological innovation and changes in industrial structure.

[Takeaways for Ordinary Investors] The key lesson from the investment strategies of the global rich is the balance between risk diversification and capturing new opportunities.
Rather than going all-in on stocks blindly, it seems necessary to maintain an appropriate share of stable products such as bonds or ETFs, while also paying attention to growth industries such as AI and green energy.