Private Equity

Tiger 21 founder: Super-rich clients looking toward private equity in 2014

In momentum market and momentum is good: Pro
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In momentum market and momentum is good: Pro

Michael Sonnenfeldt deals with a specific group of clients—a peer-to-peer network of high net worth individuals who pay $30,000 in annual membership fees.

The founder of investment firm Tiger 21 describes his business as a "learning network" in which 200 investors—made up of CEOs, entrepreneurs and hedge-funders, among other professionals—collectively manage more than $20 billion in assets. The firm's investors carry a median net worth of $75 million. So where do Sonnenfeldt's investors see the best opportunity in 2014, at least for super-wealthy investors?

"The big story for our members is private equity," Sonnenfeldt said Tuesday on "Squawk on the Street." "Since 2008, all of the growth in our equity exposures has been private equity."

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Sonnenfeldt added that many of his clients remain apprehensive after the stock market in 2013 had one its strongest years in more than a decade, coupled with the Federal Reserve's winding down its economic stimulus program.

"I don't think that they're pessimistic," Sonnenfeldt told CNBC. "It's that 2013 was so spectacular. They're just used to a reversion to the mean in everything that they do. And they're just wondering with QE continuing, how long this could go on?"

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Jim McCaughan, the CEO of Principal Global Investors, seemed unfazed by worries over whether last year's stock market surge can carry over. The major indexes have seen a volatile start to 2014, but he contends that with a price-to-earnings ratio of 17, the S&P is not in "bubble territory" and doesn't seem overextended.

The market doesn't need overly good news to continue momentum, he said, just steady economic growth.

"I would say, stay up to weight in U.S. equities and buy on setbacks," McCaughan said.

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Sonnenfeldt agreed with McCaughan that stocks remain a good play in 2014 but said his wealthy clients seemed more interested in the private equity space.

"I think the difference is these aren't passive investments," Sonnenfeldt told CNBC. "This is an opportunity to roll up our shirt sleeves and get involved. It's not simply a market return. It's where people can use their skills."

Gregory Curtis, the chairman of wealth advisory firm Greycourt, told CNBC this past weekend that he also told clients to look for private equity opportunities.

"Most of the sectors we like these days are best accessed via hedge and private equity-like strategies, which makes them difficult for non-accredited investors," Curtis told CNBC. "I am thinking of distressed assets in Europe, real estate lending, long/short strategies in Japan."

—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street."