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SPECIAL REPORT

Global population of UHNWI’s is set to rise
by 41 per cent to 263,500 by 2025.

Global ultra-wealthy numbers slip 3pc in 2015

LONDON, March 2, 2016

The number of ultra-high-net-worth individuals (UHNWIs) - those with $30 million or more in net assets - declined by 3 per cent worldwide last year (2015), a report said.

There are now around 187,500 UHNWIs around the world, down from 193,100 in 2014, according to data provided by New World Wealth for the Knight Frank Wealth Report.

However, this still marks a 61 per cent rise from a global UHNWI population of 116,800 in 2005.

While the global population of UHNWI’s is set to rise by 41 per cent to 263,500 by 2025, growth is set to be significantly slower than the previous 10 years.

James Lewis, head of Dubai, Knight Frank, said: “Despite longer term growth, data from 2015 shows the first annual dip in the global ultra-wealthy population since the financial crisis. Last year, only 34 out of the 91 countries for which individual data is compiled saw a rise in the number of UHNWIs.”

The downward shift in 2015 reflects slower economic growth and the more volatile financial climate, including the continued fall in oil prices. Currency movements have also exacerbated any declines in local currency wealth for many UHNWIs when their net worth is expressed in dollar terms.

Andrew Amoils, head of research at New Work Wealth, noted: “2015 was a poor year for global UHNWIs. This was mainly due to a fall in equity markets in US dollar terms. New business formation also slowed, especially in Europe and Latin America.

"Africa's poor performance over the past year reflects declining commodity prices and a loss of business confidence in big African markets such as South Africa, Nigeria and Egypt."

By region, North America is home to the highest number of UHNWIs, with around 69,300 people with $30 million or more in net assets, Europe follows with 46,200. Asia remains in third position with a UHNWI population of 41,100.

However, this balance is expected to change over the next decade, with forecasts showing that Asia will overtake Europe as the second biggest hub for UHNWIs by 2025.

The Wealth Report has also included data from other wealth brackets, including millionaire and, for the first time, multi-millionaire populations – which are defined as those with net assets over £10m ($13.9 million):

•    There are currently 13 million millionaires across the globe, up from 8.7 million in 2005

•    More than 1 million new millionaires are due to be created in the next decade in each of these regions – Asia (+1.6 million), North America (+1.4 million) and Europe (+1 million)

•    The global millionaire population currently hold net assets worth $66 trillion, according to New World Wealth

•    By 2025, Asia and North America will be home to almost equal numbers of billionaires, with 832 and 840 respectively

The average age of those with net assets of $10 million or more is also examined in the report. While these multimillionaires in developed economies such as the UK and Switzerland are likely to be their mid to late 50’s or 60’s, developing economies tend to have younger multimillionaires.

This highlights the opportunity for wealth creation in rapidly expanding economies, as well as the increase in global trade and mobility.

Succession and inheritance issues top list of UHNWI concerns

Succession and inheritance issues, wealth taxes and the global economy have been identified as the key concerns of the world’s wealthy, according to a survey produced exclusively for The Wealth Report.

The majority of respondents (56 per cent) singled out succession and inheritance issues as a major risk to wealth creation and preservation over the next 10 years. The state of the global economy (47 per cent) and wealth taxes (50 per cent) were also recognised as key concerns for the next decade.

When asked about the split of their clients’ investments, respondents revealed that residential real estate accounted for a quarter of the average UHNWI’s investable wealth, while commercial property made up 11 per cent.

James Lewis, head of Dubai, Knight Frank, said: “The results of this year’s Attitudes Survey highlight how important the next decade will be for UHNWIs and their advisors.”

“Wealth creation is expected to slow, which, combined with an uncertain economic outlook around the world, will require new investment and wealth management strategies.

“However, judging by the sentiment of the survey’s respondents, property will remain an important part of UHNWI investment portfolios.

“An increasing commitment to philanthropy and the growing involvement of women and the next generation in managing UHNW family wealth is an exciting and challenging development for those advisors who can adapt to the changing attitudes and aspirations of their clients,” he added.

Marc Cohen, regional managing director EMEA at Wealth-X, said: “After years of considerable growth in the number of wealthy around the world, we are entering a period of deceleration as China’s economy slows and commodity-exporting, emerging economies are hit by lower prices and demand. The number of newly wealthy will slow, and UHNWIs will find it harder to grow their wealth.”

“At the same time, the recent boom in wealth has heightened scrutiny on this group, not least as regards to tax. And with low interest rates around the world, and increasing life expectancy, retirement has become much more costly, increasing the challenge for UHNWIs to maintain and pass on wealth.

“In spite of these issues, philanthropy amongst the ultra-wealthy is at an all-time high and continues to grow. The ultra-wealthy are also increasing their asset allocation to passion investments such as fine art, and second homes overseas, enabling them to enjoy their wealth,” Cohen concluded.  – TradeArabia News Service




Tags: Knight Frank | ultra high net worth individuals | Wealth report | UHNWI |

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