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Europe has biggest number of multigenerational billionaires

Staff Writer |
UBS Group and PwC presented their joint annual billionaires report, “Are billionaires feeling the pressure?”

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The report examines wealth creation within the billionaire segment in 2015 and singles out the transfer of $2.1 trillion in billionaire wealth that is expected over the next two decades.

2015 saw a pause as total billionaire wealth fell by $300 billion to $5.1 trillion. Headwinds such as the transfer of assets within families, commodity price deflation and an appreciating US dollar, impacted the growth of billionaire wealth.

Average billionaire wealth dropped from $4.0 billion to $3.7 billion and the US added only five net new billionaires in 20151. In contrast, Asia produced one billionaire every three days, with China alone accounting for over half of the 113 additions.

The findings build on UBS/PwC's previous Billionaires Reports, released in May and December 2015. According to the new report, we are about to witness the greatest transfer of wealth in human history.

Approximately 460 billionaires will transfer $2.1 trillion, the equivalent of India’s GDP, to their heirs over a period of just 20 years. For most of Asia’s young economies, where over 85% of billionaires are first-generation, this will be the first-ever handover of billionaire wealth.

The past 20 years of exceptional wealth creation will soon be followed by the largest-ever wealth transfer. We estimate that less than 500 people (460 of the billionaires in the markets we cover) will hand over $2.1 trillion, a figure equivalent to India’s GDP, to their heirs in the next 20 years.

For most of Asia’s young economies, where over 85% of billionaires are first generation, this will be the first-ever handover of billionaire wealth.

After more than 20 years of unprecedented wealth creation, the Second Gilded Age has stalled. The transfer of assets within families, commodity price deflation and an appreciating US dollar have emerged as significant headwinds.

In 2015, in the markets we cover, 210 fortunes broke through the billion-dollar wealth ceiling and 160 billionaires dropped off, leading to a net increase in the billionaire population of 50 to 1,397.

Yet their total wealth fell from $5.4 trillion to $5.1 trillion. Average wealth fell from $4 billion in 2014 to $3.7 billion in 2015. It is still too early to tell if 2015 signals a pause in the Gilded Age or something more.

Of the billionaire fortunes that have fallen below the billion dollar mark since 1995, 90% were not preserved beyond the first and second generations. At a time of economic headwinds and imminent wealth transfer, Europe’s old legacies are a model for new billionaires to avoid this fate.

Germany and Switzerland, in particular, are the countries with the greatest share of ‘old’ wealth. Asia’s family- orientated billionaires may wish to adapt the European model of wealth preservation to their own needs.


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