Wealth-X has taken on UBS as a partner in its continuing series of reports on the ultra-wealthy; that is, on people with a net worth of at least $30 million, including shares in public and private companies, residences, other real estate holdings, and such assets as art or airplanes.
All wealth figures below are in U.S. dollars, as is the case in the report.
The latest report, the third in the series, includes some new features, including the breakdown of certain statistics by sex. Thus, we know that the industries that account for the wealth of the men in the UNHW world are, in order of significance: finance, banking and investment; industrial conglomerates; manufacturing; real estate; construction and engineering.
Meanwhile, the industries that account for the wealth of the women in the UHNW world, again arranged in order, are: non-profit and social organizations; finance, banking and investment; textiles, apparel and luxury goods; industrial conglomerates; manufacturing.
By Region
The kick-off premise of the report is that “banks which serve UHNW individuals are facing new challenges due to a shift in the behavior and expectations of their clients” who are “more information-hungry than ever before.” They want their financial servants to offer them “complex, bespoke solutions” and speed in execution.
The bulk of the report is divided by region. Some major points made are as follows:
Economic recovery in North America “has been positive” and has been characterized by strength in the equity markets. The authors cite the IMF forecast that the US economy will expand by 1.9% in 2013, and that of Canada by 1.5%.
Unfortunately, they add, the region’s economy still depends on the receipt of regular reassurances from the Federal Reserve.
The U.S. accounts for one-third of the global UHNW population and wealth.
In Europe, there has been stagnation in recent years, but Wealth-X and UBS see “signs of rebound.” The rebound even includes Greece, the scene of what some have called the most frightening financial horror story in recent years. Greece is now home to the second fastest-growing set of UHNWs in Europe, in part because fears that the country would pull out of the Eurozone have receded, and the new confidence on that point has led to a robust stock market rally.
To the north: Germany has the second-largest UHNW population in the world, second only to the U.S., including 148 individuals with a net worth in excess of US$1 billion each (there were only 137 such individuals a year ago).
Its central bank forecasts that the country’s GDP will increase this year, though only by 0.3%, due to the higher wages that are fueling additional consumption.
The recent economic story in Asia is mixed: which isn’t surprising, since Asia is a very big place! On the one hand, there is China, which has experienced “slower GDP growth, a credit crunch, and a government clampdown on luxury spending to combat corruption in the economy.”
More hopefully, there is growth to be found in Japan, Hong Kong, and Indonesia.
Indonesia in particular has experienced “robust growth in all wealth tiers” except for the very highest. Indonesia only has 23 billionaires, and that is down from the 25 it had last year. The total wealth of its billionaires also has declined, from $50 billion to $47 billion.
But Indonesia now has 200 individuals in the $50 million to $99 million tier, up from 175. It has 100 individuals with between $100 million and $199 million, up from 95 last year. And so forth through all tiers short of the very top.
Private consumption, the report says (citing the World Bank) is “expected to remain strong this year, spurred by rising employment” and wage increases.
The authors of this report see Latin America’s economic performance over the last year as a disappointment, as a case of opportunities unfulfilled. This is notably the case in Brazil, where household indebtedness is markedly increased, and where the countries trade deficit exceeded $5.3 billion in the first five months of 2013.
Brazil’s billionaire population did grow though. By exactly one: there were 49 members of that club last year and there are 50 now. It is difficult to assign much significance to that, for Brazil or Latin America.
Africa has seen robust growth over the last year. The report offers a list of five major wealth indicators: GDP, Currency/currencies, equities, UHNW population, and combined wealth. Africa gets a thumbs’ up for four of these indicators. Only the thumb representing currencies points down. Inflation “continues to be an issue as African governments set targets to prevent rates rom spiraling.”
Global Themes
Some of the broad (not country or region specific) themes of the report are:
- That both the total UHNW population and the amount of wealth it represents is on the increase. At present, the UHNWs together represent $27,770 billion, an increase of a little less than $2 trillion over one year;
- That the last year, specifically the 12 months beginning July 2012, has been a time of surprises, both positive and negative; and
- That the once thriving BRICS are experiencing various sorts of stall.