The opportunity to capitalize on individual experience to make a potentially savvier long-term investment is a key part of the appeal of private equity, Sonnenfeldt explained.
"Most of our members are wealth-creators, first-generation entrepreneurs, so they made their money building small businesses into large businesses. When they sell it, their natural inclination is to roll up their shirtsleeves and invest in another small business because they have the expertise and the tolerance to do that," he said.
"If you had built a printing business as an entrepreneur you might be now an investor in a digital printing business…Everybody has some expertise and if they can lever their individual expertise into their investments they can really create an edge."
Investment bank UBS last week released a report on billionaires which highlighted their total wealth had declined in 2015 by $300 billion to $5.1 trillion while average billionaire wealth fell from $4.0 billion to $3.7 billion. The report's authors blamed costly challenges including the transfer of assets within families, commodity price deflation and an appreciating US dollar for the losses.
In a sub-optimal climate for billionaire wealth expansion, the poor performance of hedge funds over the past year has caused an acceleration in client money deserting some managers. According to figures released Thursday from Hedge Fund Research, $50.1 billion has been withdrawn from the industry so far in 2016.