From Vietnam to Kazakhstan, the global Ultra High Net Worth population is growing. We share some of Knight Frank’s insights as to where, how and why
The number of ultra-wealthy individuals across the globe rose by 3% last year. Nearly 5,000 people joined the ranks of UHNWIs in 2013, taking the number of individuals with US$30m or more in net assets to over 167,000 worldwide.
The number of UHNWIs across the world has ballooned by 59% since 2003, more than doubling in the Middle East, Latin America, Australasia and Africa.
While UHNWI numbers in North America and Europe remain slightly below the levels seen in 2007, these regions saw the strongest rates of growth last year. North America gained 1,500 individuals (3.5% increase) as Europe gained nearly 2,000 (3.3% increase).
WealthInsight forecasts that the ranks of the ultra wealthy will grow by 28% in the coming decade, reaching around 215,000 individual by 2023. The number of billionaires is expected to rise to 2,315 by 2023 – a 148% increase on the number in 2003.
“ The number of UHNWIs across the world has ballooned by 59% since 2003 ”
Vietnam tops the list of fastest growing UHNWI populations by country, forecast to increase 166% between 2013 and 2023. Followed by Indonesia (144%), Cote d’Ivoire (116%), Kazakhstan (109%) and Mongolia (100%).
Just as Vietnam tops the charts for UHNWI growth over the next decade, its largest urban centre, Ho Chi Minh City, is expected to head the cities list, with the number of UHNWIs tipped to rise 173% over the next 10 years.
However, this rapid growth must be balanced against the fact that, as in many of the fastest-growing cities, Ho Chi Minh’s UHNWI population is coming from a very low base.
Following Ho Chi Minh City, the fastest city populations of UHNWI’s to increase will be Jakarta (148%), Ordos (141%), Mumbai (126%) and Delhi (118%).
Forecast growth in wealthy individuals 2013-2023
WealthInsight forecasts that the number of UHNWIs will grow by 80% in China over the next decade, while the number of billionaires will also rise by 80%, to hit 322. This will exceed the total number of billionaires in the UK, Russia, France and Switzerland combined.
Even with the hurdles facing China, its influence should not be underestimated, according to Jim O’Neill, former chairman of Goldman Sachs. He said recently: “Unless China really slows down a lot more than consensus, its contribution to the world is just going to get bigger and bigger."
“Although growing at a rate of around 7%, less than during the past 30 years, China will add an extra US$1tr to global GDP every year this decade. It’s the equivalent of adding another Germany and Japan to the world by the end of the decade.”
“ The number of UHNWIs will grow by 80% in China over the next decade ”
Russia’s UHNWI population is set to be depleted by emigration. While the number of Russian UHNWIs has risen by 372% over the last decade, the forecast for the next 10 years is for a more modest 39% uplift. In fact, the data shows that the number of UHNWIs in Russia fell last year.
Ms Vlasova explains: “The data may not adequately reflect the wealth creation happening in Russia as the movement of UHNWIs from Russia to live or run their businesses in other parts of the world has affected, and will continue to affect, the figures."
“The departure of these UHNWIs from Russia has boosted the number of UHNWIs in global cities such as London, New York and Dubai, and reflects the trends in global investment being experienced in those financial centres.”
Number of Billionaires, US vs China
Despite a slowing in the pace of growth, the US will still top the charts for the number of UHNWIs in 2023, with an expected 47,468 individuals with US$30m or more in net assets, a fifth of the world’s expected total, and three times as many as in China. In terms of centa-millionaires and billionaires the US is also on top, with 13,807 and 503 respectively.
There is increasingly heated debate as to when China’s economy will overtake the US to become the largest in the world. But in terms of wealth creation, and the population of ultra-wealthy individuals, the US will be firmly holding the top spot for some time to come.
“ Russia’s UHNWI population is set to be depleted by emigration ”
UHNWIs, and in particular centa-millionaires and billionaires, are often globally mobile, with property and business interests in many different locations. This trend is only likely to grow more prevalent, especially as an increasing number of countries seek to repair their balance sheets by raising taxes across the board.
The political benefits of imposing wealth taxes also make them an attractive option for governments. In recent years, this has resulted in more UHNWIs thinking very carefully about where to base themselves.
Dr Malmgren says: “I would argue that the UK has now emerged as the world’s most attractive residence for non-domiciles. The crackdown on tax havens in Switzerland has removed these old options for new capital. As a result, there has been a huge influx of global capital into the UK – and this is reflected in many things, including property prices.”
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