(May 28): Members of the world’s super-rich are electing to take cash off the table as stocks repeatedly test new highs, offloading more than US$1 billion ($1.3 billion) of shares in recent weeks.
A scion of Germany’s Viessmann dynasty last week sold about US$750 million of Carrier Global Corp, a Florida-based maker of air conditioning equipment, while Danish tycoon Henrik Lind offloaded the equivalent of roughly US$175 million in facility manager ISS A/S. Chris Ellison, founder of Mineral Resources Ltd, pocketed A$122.5 million from the sale of about 10% of his stake in the Australian mining services business this month, his first sale in that holding for almost a decade.
The transactions offer a snapshot into how wealthy private investors are locking in returns in larger positions as global stock indexes hit record highs despite geopolitical turmoil, fuelled by enthusiasm for AI and rising corporate earnings. Banks including Goldman Sachs Group Inc believe stocks have further to go, even as some investors are worrying that values look overstretched.
Other ultra-wealthy individuals paring bets include Pamela Wall, whose late husband co-founded Australian technology company Codan Ltd. She cut her stake in the firm by almost a quarter at the start of May in a roughly A$312 million block trade, with the proceeds set to support her philanthropic activity, according to a regulatory filing.
Wall and the other ultra-wealthy sellers still hold stakes worth at least US$4.9 billion overall, according to data compiled by Bloomberg. Codan’s share price rose almost 47% this year through Wednesday, surpassing MSCI Inc’s worldwide gauge of stocks, while those of Carrier, ISS and MinRes all gained more than 22%.
See also: Four in 10 wealthy Asian boomers lack succession plans, survey shows
The investors are “reducing single-name risk,” said Marc Debois, founder of FO-Next, an advisory firm for ultra-wealthy families and their investment firms, calling it a “disciplined decision.”
Publicly traded equities are typically the largest strategic allocation in the portfolios of investment firms for the ultra-wealthy, UBS Group AG said in a report last year. Fund managers are now the most overweight on equity allocations since early 2022, Bank of America Corp said this month, leaving them close to triggering the lender’s sell signal.
Max Viessmann, head of the fourth-generation dynasty behind one of Germany’s biggest fortunes, carried out his block sale of Carrier stock through JPMorgan Chase & Co for “portfolio rebalancing,” according to a regulatory filing, which said he retains a “long-term” commitment to the US business.
See also: UBS family office clients cut US exposure in wealth revamp
Wall plans to keep her remaining Codan shares for at least another 12 months, while Ellison’s sale proceeds will support him creating a family office to help manage a fortune that’s still largely tied to his stake in the mining business, other filings show.
Shares in MinRes have risen more than 230% since December 2017, the month that the company said that Ellison had most recently cut his stake before this month’s sale, data compiled by Bloomberg show.
They’re “preserving optionality and redeploying capital on their own terms,” Debois said.
Uploaded by Magessan Varatharaja
