Ultra-High-Net-Worth Investors and the Real Asset Value Chain

Ian Barnard

Ultra-high-net-worth (UHNW) investors and their families are a diverse group of investors, more variegated than the investment institutions that aggregate the investable assets of the majority of citizens. But, at the same time, they have investment objectives and practices that overlap with those of investment institutions. They too seek to protect their portfolios from inflation. Indeed, they may pay more attention to the risk of inflation, which is reflected in widespread ownership of real assets, including particularly, but not exclusively, real estate.

UHNW investors face a perceived inflation sensitivity that is arguably more acute than that which confronts many investment institutions. To start with, their time horizon is inter-generational, thus longer than is typical for inflation-sensitive institutions such as, for example, pension funds. Moreover, they believe that their expected and realised inflation is higher than that of the average consumer; their liabilities go up in price at a higher rate than that measured by consumer inflation, as we shall show in the following. And, what is more, the perceived cost of protecting against inflation is higher because they have