Survey Of Affluent Americans Shows US Investors Looking Overseas

The U.S. Trust Survey Of Affluent Americans polled the top tier of wealthiest Americans about their economic outlook, investment behavior, wealth management, philanthropy and intergenerational wealth issues.

A majority of the wealthy people surveyed believe hedge funds are good vehicles to provide strong returns and hedge market risks. Still, about three-quarters of this group say a good hedge fund is difficult to find and just as difficult to investigate.

However, those surveyed believe that the U.S. stock market is becoming riskier, and many are shifting to international equities. Many wealthy people expect to get bigger gains overseas than they do here in the U.S., with an expected average annual return of 9.66% in international equities versus 8.85% in the U.S. markets.

The Survey Of Affluent Americans constitutes of Americans with an investable net worth greater than $5 million, not including primary residence. In addition, included in this study is a special sub-sample of ultra high net worth Americans with total assets of $25 million or more.

In the report, the U.S. Trust says 74% of wealthy people believe that the budget deficit will affect the economy over the long term. This, they believe, will spill into the international arena as well, and leads them to worry about the U.S.'s role in international finance. With recent market events in China setting off a global ripple, as well as dollar lows, there is certainly ample precedent for their concerns.

And the survey indicates that these concerns aren't limited to the near term. Most wealthy people say that the next generation will have a more difficult time financially. Seventy-two percent of respondents worry that environmental issues will require more government spending and that taxes will rise significantly over the next few years. As well, they believe high taxes will reduce the value of their estates.

Fauchier Partners Launches Special Situations Fund Of Hedge Funds

Fauchier Partners announced the launch of the Jubilee Special Situations Fund (JSSF), which will provide investors with returns more commonly associated with longer term and less liquid investments. JSSF was launched on 1 April with approximately $50 million committed. It will initially be open for investment until June 2007.

The fund of hedge funds has been designed as a vehicle for investors who are able to commit funds for longer periods of time and has a target return of LIBOR + 8%. The London Interbank Offered Rate Index (LIBOR) is an average of the interest rates that major international banks charge each other to borrow US dollars in the London money market. Like the US treasury the CD indexes, LIBOR tends to move and adjust quite rapidly to changes in interest rates.

Its portfolio consists of hedge funds investing in the debt and equity of private and publicly-listed companies, with a focus on distressed debt, direct lending and structured public and private equity. The balance will be invested in more traditional value-based investments.

Fauchier Partners, founded in 1994, is a specialist London-based firm, which manages a variety of funds of hedge funds and also advises a number of listed closed-end funds of hedge fund vehicles. It has the equivalent of approximately $4.7 billion under management.