Bay Area investors are bullish on the regional economy and plan to increase their holdings in local technology, biotech and pharmaceuticals companies, a survey released today found.
These investors are also more likely than those elsewhere in the country to let personal and political concerns about the environment or inequality drive some of their portfolio, a Morgan Stanley poll of households with more than $100,000 to invest found.
The poll found that 91 percent of so-called high net-worth investors believe that the San Francisco Bay Area economy will continue to gain strength in 2015. Most plan to increase their local holdings. That cycle of reinvestment could make the positive feelings about the economy a so-called virtuous cycle.
“The San Francisco area is on fire right now,” said George Noceti, a Morgan Stanley wealth adviser. “All one has to do is drive in the Silicon Valley or San Francisco and see all of the new buildings.
“There is a spill-over effect. If investors are confident about the future, they are going to put more risk capital out there.”
Tech led local sectors eyed by investors, with nearly 85 percent planning to increase their local tech investment. Nearly 70 percent also have an appetite for increased investment in local biotechnology companies and 60 percent look to expand in the red-hot local real estate market.
And, in what may be good news for gradual growth, many said they are willing to wait for returns from start-ups and other potentially volatile local investments.
“Basically the survey shows that Bay Area high net-wealth investors are optimistic about our local economy and our national economy,” Noceti said. “People are working, and when people are working they are happy.”
The poll also found that of the Bay Area investors:
- 87 percent worried about the growing income gap.
- 44 percent said their investments reflected issues of personal importance, including water conservation and healthy living.
- More than half said they considered issues of personal importance before investing.
“That’s not true everywhere,” Noceti said. “The bottom line is still the most important thing, but investors are looking at companies that are socially responsible.”
And, he added, those companies can prove more profitable because they face fewer regulatory fines and less public relations problems from bad practices.
Clean energy funds and water-based conservation funds top the list of popular investments for the Bay Area’s socially conscious.
More than 46 percent of those polled planned on investing in water conservation funds in the next three years. Another 55 percent could see themselves investing in clean energy funds over the same time frame.
The Morgan Stanley poll is based on interviews conducted between October and December, 2014, of more than 1,000 households with $100,000 or more to potentially invest. About 300 of those polled are in the Bay Area.
One in five U.S. households has $100,000 or more to potentially invest, according to Morgan Stanley.