Leading High Net Worth Investor Group TIGER 21 Profiled in Richistan, New Book Examining Wealth in America
Wall Street Journal reporter Robert Frank features TIGER 21 as leading exemplar of new peer-to-peer investor groups in his “Journey Through the American Wealth Boom and the Lives of the New Rich”
_________________________________________________________________________________
NEW YORK (July 11, 2007) — In Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich, Wall Street Journal reporter Robert Frank chronicles the new breed of wealthy in America. As he follows the trail of today’s high-net-worth population, one thing is abundantly clear; while newly-minted fortunes have bought a lot of luxuries, this sudden affluence has also complicated people’s lives in manifold ways.
That is where TIGER 21 comes in. The investor learning group is featured prominently in Richistan and with good reason. As Frank notes in his book, TIGER 21 is “the nation’s biggest wealth peer group.” Its members have minimum net worths of $10 million and collective investable assets of nearly $10 billion, reflecting a new base of influence and intelligence among affluent investors. TIGER 21 provides a confidential environment, where members can discuss intimate financial matters and share personal experiences on a broad range of issues.
In a chapter entitled “Worried Wealth, The Trouble with Money,” Mr. Frank presents a rare glimpse into a TIGER 21 meeting during which members candidly discuss the performance of their assets and how the latest world news affect their lives and wealth. Topics at the session Frank attends include a soured business relationship, health tips, family matters and dealing with home renovations.
At the meeting observed by Mr. Frank, a member with a $50 million portfolio details his financial assets and investments and tells the group that he is worried about the impact of his wealth on his children. Other TIGER 21 members offer suggestions on how best to address his situation and express concern over his heavy concentration of bonds. He acknowledges this overweighting and confirms that his cost of living could soon be outpacing his income.
“Getting together with a group of strangers who were equally rich proved oddly liberating. And in a world where the wealthy feel like constant targets, Tiger was like an intellectual gated community. They felt safe,” Mr. Frank writes in his book.
TIGER 21 was founded in 1999 by real estate developer Michael Sonnenfeldt after the sale of his successful real estate firm the year before, exactly the sort of liquidity event that places many entrepreneurs in need of TIGER 21's disciplined approach to wealth management. In fact, Mr. Frank provides statistics showing that the rich in America are expanding at a remarkable rate. From 1995 to 2003, the number of U.S. millionaires doubled. During the same period, the number of households worth $5 million, $10 million and $25 million, respectively, all doubled. In 2005 alone, the US minted 227,000 new millionaires. TIGER 21 has experienced a similar spike in its ranks, with membership nearly doubling each of the past three years – now totaling more than 140 nationally.
TIGER 21 members range in age from their mid-30s to their early 80s – with a majority in their 40-50-60s. They include serial entrepreneurs and corporate chieftains as well as Wall Street professionals and longtime private investors.
“We are honored that Robert Frank chose TIGER 21 to illustrate how the confidential community of high net worth investors we create is meeting an important need for our unique membership. He has done a terrific job conveying the day-to-day issues and personal concerns that go with wealth in today’s society,” says Mr. Sonnenfeldt.
"The annual membership dues of $25,000 per member basically cover our expenses, but this amount is insignificant to the value of the time our members are investing in their TIGER 21 experience, and has proven to be a small fraction of the benefits they receive," he adds.
The highlight of the monthly, day long group meeting each member participates in (12 member limit per group) is the portfolio defense session, where members critique one another's personal balance sheets, income statements, and financial goals in context with the larger events in their lives. As in an oral exam, members are challenged on their investment decisions and presented with alternative viewpoints, giving each member an opportunity to see his or her strategy in a new light.
“We provide a private forum for our members where tough, yet caring, questions can be asked and they are able to explore life issues through the lens of their wealth. The portfolio defense is a key building block in a disciplined program that supports members as they learn to be responsible wealth managers. Indeed, our members report approximately 200-300 basis points excess performance in their holdings through our process,” says Sonnenfeldt.
“One of the biggest benefits is exposure to the many ways a diverse set of members have to look at investment opportunities offered by presenters, which includes leading portfolio and hedge fund managers who come to educate our members. There is a certain comfort level that members have with recommendations made by fellow members. In fact, if an average TIGER 21 member is able to increase their portfolios annual performance by just one percent, then their yearly dues are easily more than covered 10 or 20 fold,” says Tommy Gallagher, a TIGER 21 member and the organization’s president.
###
Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich. By Robert Frank. 277 pages. $24.95. Crown Publishers. Robert Frank writes the Wealth Report column for The Wall Street Journal.