A lot of wealthy families use common sense strategies to growth their wealth, this is according to Kerry Fynn, chief executive AlphaWealth.
“One of the trends I have observed is lesser over diversification and the willingness to take high convection bets when they feel that an investment is representing fair value,” Fynn told CNBC Africa.
“Another thing I find lacking in the general investor market is an attention to liquidity. If you prepare to take some liquidity risk over a long period of time it will lead to a greater compound of returns in your portfolio.”
Fynn said wealthy families were now focusing more on asset protection strategies.
“Asset protection mechanisms are still very important especially for wealthy families. Though trust funds have been used as a way of wealth protection, it is no longer used as a leading method,” he said.
“Now is more about succession plan and making sure that those funds are passed on to future generations in the way the original funder wanted them to be. Protection from creditors and estate planning that has become an important part of the portfolio.”
Fynn said one of the important parts of this business is helping families or couples to define their common investment strategy and the reality that all parties want is to generate the highest compound return on investment with the lowest risk possible.
“A part of the educational process in the investment strategy is walking through different objectives and risk profiles so as to ensure all parties are on the same page,” he added.
Fynn added that South Africa had outperformed its peers in the global space by creating some of the high return risk adjusted portfolios.
“South Africa has an incredible pool of hedge funds as we have a nascent industry with amazing talent. If one looks at the top hedge funds managers in the country, they have created high return risk adjusted returns.”