New report shines a spotlight on new trends among billionaires, including the use of networks and investments in art and sportsUBS reports focuses on ‘the year of the entrepreneur,’ and self-made billionaires. Visit www.ubs.com
October 29, 2017 — NEW YORK–(BUSINESS WIRE)–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 today 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.
Key Findings of the report:
- Globally, the total wealth of billionaires rose by 17 percent in 2016 to USD 6.0 trillion, double the rate of the MSCI World Index. Asian billionaires now outnumber their US counterparts, but the US still retains the greatest concentration of wealth
- Billionaires are responsible for businesses that employ a workforce equal to that of the UK
- US billionaire cohort grew by 25 to 563 individuals; billionaire’s wealth in the US has been growing by 15% since last year amounting now USD 2.8 trn
- Last year, technology was the biggest driver of wealth creation, as is to be expected in the country whose entrepreneurs have pioneered technological innovation. This was followed by financial services and then materials
- Networks are playing an increasingly powerful role, with families working together on new ventures and younger entrepreneurs using contacts to orchestrate deals; billionaires are also playing an increasingly important role in art and sports
Wider societal impacts
It also analyzes 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.
John Mathews, Head Of Private Wealth Management and Ultra High Net Worth, UBS Wealth Management Americas:
“Once again, we celebrate the era of the entrepreneur in the United States with self-made billionaires comprising the majority of new entrants. After the brief pause last year, we see that billionaires’ wealth has grown dramatically this year and remains strongest in the United States.” More impactful however, may be the legacies that billionaires create through their interests. Their cultural passions in art and sports, in particular, have a significant impact across the globe and in the communities where they live.
Not surprising, we found that networks are of increasing importance to billionaires and based on the insights we have gathered over the years, we are able to offer them customized platforms to tap into. The findings of this report help us to stay ahead of the issues that matter to our clients and enable us to give them more tailored advice based on insights from the market and from their peers.”
Thomas J. Holly, US Asset & Wealth Management Leader, PwC:
“The US still leads in the world’s largest concentration of billionaire wealth. As expected in a country with such an entrepreneurial mind set, technology is the biggest driver of wealth creation. These entrepreneurs are leveraging their networks and focusing on not only growing their wealth, but also making sure they are socially impactful. This has caused the rise in impact investing, with the aim to balance competitive financial returns with positive societal outcomes.”
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.
About UBS Wealth Management Americas
Wealth Management Americas is one of the leading wealth managers in the Americas in terms of financial advisor productivity and invested assets. Its business includes UBS’s domestic US and Canadian wealth management businesses, as well as international business booked in the US. It provides a fully integrated set of wealth management solutions designed to address the needs of ultra-high net worth and high net worth clients.
UBS is committed to providing private, institutional and corporate clients worldwide, as well as retail clients in Switzerland, with superior financial advice and solutions while generating attractive and sustainable returns for shareholders. Its strategy centers on its Wealth Management and Wealth Management Americas businesses and its leading universal bank in Switzerland, complemented by its Global Asset Management business and its Investment Bank. These businesses share three key characteristics: they benefit from a strong competitive position in their targeted markets, are capital-efficient, and offer a superior structural growth and profitability outlook. UBS’s strategy builds on the strengths of all of its businesses and focuses its efforts on areas in which it excels, while seeking to capitalize on the compelling growth prospects in the businesses and regions in which it operates. Capital strength is the foundation of its success.