The super rich are still making money in the crisis. It pays to be super-rich.
Most investors have suffered losses to their pension funds and portfolios, but those able to meet the multi-million dollar investment thresholds of private equity and some hedge funds are coming out ahead.
“You’ve got so many investment opportunities that are open only to very rich people,” said one London-based financial adviser specialising in ultra rich investors. “The super rich are doing very well..."
Certain investment vehicles, such as hedge funds, can thrive at times of market stress because they are able to use risk management tools such as derivatives and make short-selling sales that make money when an asset price falls. Some big name hedge funds such as Brevan Howard, Man Group’s AHL and Winton have continued to make gains for their investors during recent market volatility.
The fact that the super rich can write cheques for millions of dollars also means they have exclusive access to the few real estate assets where prices are still rising, such as the central London residential property market. While property prices around the world drop or stagnate, according to upmarket property consultant Savills, house prices in the smartest areas of central London are set to be up 8% this year. London commercial property is also proving a popular investment with the ultra wealthy. British private bank Coutts, owned by Royal Bank of Scotland, plans to launch a commercial property fund in October open only to clients worth 10 million pounds or more.
Meanwhile austerity is euphemism for class war waged by the capitalist class against the workers. It may be their crisis, but they make it our problem. We need a revolution, not a reformation.