U.S. Entrepreneurs Turn to Equities Even as Investors Broadly Brace for Market Volatility, Finds 2019 BNP Paribas Global Entrepreneur Report
- Sixty-nine percent of American entrepreneurs tout technology as their sector of choice for future investments
- When it comes to measuring the success of sustainable and socially responsible investments, U.S. entrepreneurs cite access to healthcare and reducing carbon emissions as top priorities, after returns
- The global report surveyed 2,763 multi-millionaire entrepreneurs in 23 countries, representing a total net worth of $16 billion
SAN FRANCISCO, Nov. 21, 2018 /PRNewswire/ -- Equities were the top investment choice for U.S. entrepreneurs, ranking ahead of all other asset classes – including fixed income, cash and even their own businesses – according to the 5th annual BNP Paribas Global Entrepreneur Report, released today by BNP Paribas Wealth Management and Bank of the West Wealth Management.
This was the first time in the study's history that equities led the way as the investment vehicle of choice for entrepreneurs around the world. In the U.S., entrepreneurs allocate 28 percent of their portfolios to equities—a significantly higher proportion than the worldwide average of 20 percent portfolio allocation in the stock market. At the time the survey was fielded, an overwhelming 69 percent of respondents in the U.S. pointed to technology as their top sector of choice for future investments, considerably outpacing financial services (37 percent), telecommunications & media (34 percent), and pharmaceuticals and healthcare (33 percent).
"In the United States, entrepreneurs are looking at the equities markets as a primary driver for growing their portfolios. And while returns are certainly an important metric of success, they do not see this as the only metric of success," said Pierre Ramadier, Group Head of Wealth Management for Bank of the West. "The founders, movers and shakers who are powering American ingenuity are also committed to giving back—leveraging their wealth to support burgeoning businesses, making energy transition possible and solving one of America's most significant quagmires: access to affordable healthcare services."
Overall, U.S. entrepreneurs' top asset allocation priorities were:
- Equities (28 percent),
- Fixed income (17 percent),
- Their own businesses (13 percent)
- Cash (13 percent)
While socially responsible investments only make up 4 percent of U.S. entrepreneurs' portfolios, responsible investing is picking up steam on the global stage—in fact, it is a top-five growth opportunity for the wealthiest global entrepreneurs. Thirty-seven percent of ultra-high-net-worth (UHNW) respondents from around the world believe responsible investments represent the most promising growth potential over the next five years.
Further, Sustainable & Responsible Investments (SRI) ranked second among global respondents as one of the top areas of future investment. Entrepreneurs are starting to see immense opportunity to generate financial returns from SRI as well as the opportunity to champion social good. In the U.S., entrepreneurs name improvement in access to healthcare services (40 percent) and reduction in carbon footprint (40 percent) as top metrics for measuring the impact of their responsible investments, outside of financial returns.
Additionally, more than two thirds (67 percent) of U.S. angel investors say they are motivated by the chance to support and mentor up-and-coming entrepreneurs. Aligned with this desire to mentor, elite entrepreneurs around the world actively support other entrepreneurs through private investments in high-potential companies (85 percent), paying it forward to the next generation. Of this group of elite entrepreneurs, the most enthusiastic advocates for these types of private investments are millennials. This is especially true in the U.S.; the younger generation of entrepreneurs is twice as likely as Baby Boomers to invest in venture capital funds, start-ups or angel investments. Additionally, American entrepreneurs favor private equity (47 percent) for their direct private investments.
The research, conducted by Scorpio Partnership, involved an online survey with 2,763 multi-millionaire entrepreneurs in 23 countries, representing a total net worth of $16 billion. The survey, conducted from July to August 2018, included 387 entrepreneurs that were surveyed in the U.S.
For more, please see the full report here.
About Bank of the West
The fundamental belief that a bank should have a positive impact on society drives Bank of the West. At a time when people demand more from companies, we are taking action to ensure our activities help protect the planet, improve people's lives, and strengthen communities. That's why we are investing where we can have a real impact: supporting energy transition, helping enable female entrepreneurs and financing innovative start-ups. As the bank for a changing world, Bank of the West is committed to sustainable finance along with our parent company BNP Paribas, which is one of the only financial organizations in the world to adopt the UN Sustainable Development Goals. Through Digital Channels and offices across the U.S., Bank of the West provides financial tools and resources to more than 2 million individuals, families and businesses.
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About BNP Paribas Wealth Management
BNP Paribas Wealth Management is a leading global private bank and #1 Private Bank in the Eurozone. Present in three hubs in Europe, Asia and the US, over 6,600 professionals provide a private investor clientele with solutions for optimising and managing their assets. The bank has €358 billion worth of assets under management (as at 30 September 2017) and was elected "Best Private Bank for Entrepreneurs" in 2016 and 2017. BNP Paribas Wealth Management leverages all of the Group's capabilities to help entrepreneurs build a bridge between professional and personal projects at each step of development of their company.
https://wealthmanagement.bnpparibas.com/en/who-we-serve/entrepreneurs.html
About Scorpio Partnership
Scorpio Partnership is the leading insight and business consultancy to the global wealth industry. The firm specialises in understanding the wealthy and the financial institutions they interact with. We have developed four transformational disciplines – SEEK, THINK, SHAPE and CREATE – each designed to enable business leaders to strategically assess, plan and drive growth. We leverage our deep insight into client needs and expectations to create practical and actionable business development strategies. Scorpio Partnership has conducted more than 500 global assignments across wealth for institutions in the banking, fund management, family offices, law, trusts, regulation, IT and technology, insurance and charity sectors. In the course of these assignments, the firm has interviewed almost 75,000 private investors and advisors. Scorpio Partnership has won multiple awards for its consultancy surveys, market insight and thought leadership across Europe, Asia, and the United States. These awards have been voted by industry peers. The firm is part of McLagan, an Aon Hewitt group company.
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