Return to growth for billionaires globally, with Asia outpacing the US for the first time

Return to growth for billionaires globally, with Asia outpacing the US for the first time

Return to growth for billionaires globally, with Asia outpacing the US for the first time

The FINANCIAL -- Billionaire wealth returned to growth in 2016 after falling the year before. For the first time, Asian billionaires outnumbered their US counterparts, but the US still retains the greatest concentration of wealth. If the current trend continues, the total wealth of Asian billionaires will overtake that of their counterparts in the US in four years.

These findings emerge as UBS Group AG and PwC on October 25 released their joint annual billionaires insight report, New wealth creators gain momentum. Now in its third year, the report draws upon UBS and PwC’s extensive networks, and aims to better understand the billionaire population globally.

The report highlights subtle trends emerging, including the increasingly important role of peer networks to orchestrate new deals and access significant funding outside of capital markets. Moreover, elite philanthropic and impact investing networks are emerging.

It also analyses the wider societal impact of billionaires in terms of improving living standards, job creation and providing access to cultural capital. Specifically, the report finds that:

The 1,542 billionaires analysed own or partly own companies that employ at least 27.7 million people worldwide – roughly the same as the UK’s working population. The new entrants on the list in 2016 employ at least 2.8 million people.

Billionaires are creating alternative legacies through their cultural pursuits. They are becoming more engaged in the arts and, increasingly, investing in sports clubs. Private museums are growing in number and public museums are receiving more funding, increasing the accessibility of art to the public. Billionaires are also helping sports clubs to become more sustainable, helping them to deliver associated benefits to the communities they are part of.

Josef Stadler, Head Global Ultra High Net Worth, UBS, comments on the new report:

“This year we have seen not only a return to growth for billionaire wealth, but also a significant shift in its geographic dimensions. Dramatic growth in Asian wealth shows it could overtake the US in just four years.”

“Beyond this headline figure, billionaires are also having a wider impact on the global economy through the people they employ and the growth they foster. The societal effect of great wealth is, however, not exclusively economic. Through their own passion for arts and sports, they are playing an increasingly important role in enriching the cultural life of communities.”

“The findings of this report help us to stay ahead of the issues that matter to our clients, who comprise one in two of the world’s billionaires, and enable us to offer them more tailored advice based on insights from the market and from their peers.”

Dr. Marcel Widrig, Partner and Private Wealth Leader, PwC comments:

“Whereas last year we were concerned about issues such as regulatory upheaval and currency fluctuations, this year's return to growth and change in demographics shifts the focus to idealism, philanthropy and impact investing.”

“It's not enough anymore to just preserve and grow wealth. Today's billionaires also feel a responsibility to drive social and economic impact - whether that means creating a private museum to promote the arts or buying a professional sports team to promote a passion. This will be even more important when an estimated USD2.4 trillion of billionaire wealth is expected to be transferred in the next two decades. Technology, the creation of social networks and high-profile examples of philanthropic peers have all had an impact on this exclusive group."

Billionaire wealth in numbers

Total billionaire wealth rose by 17 percent from USD 5.1 trillion to USD 6.0 trillion in 2016, led by a surge in Asia’s emerging billionaire class and growth in the materials, industrials, financial and technology sectors. On average, a new billionaire was created in Asia every two days, with the total number of Asian billionaires rising by almost a quarter to 637, compared to 563 in the US.

The combined wealth of Asian billionaires grew by almost a third from USD 1.5 trillion to USD 2.0 trillion, but still lags behind the US, which maintains the largest concentration of billionaire wealth. In 2016, US billionaires saw their wealth increase from USD 2.4 trillion to USD 2.8 trillion, driven by technological innovation, financial services and materials. The report shows that if the current trend continues, the total wealth of Asian billionaires will overtake that of their counterparts in the US in four years.

The story for Europe in 2016 was largely the preservation of wealth. There were 342 billionaires in Europe by the end of the year, but growth remained static. Overall wealth grew modestly by 5 percent to just over USD 1.3 trillion, with 24 new billionaires and 21 dropping off, a third of them due to death. This corresponds with previous findings that Europe has the highest number of multi-generational billionaires.