The world’s wealthiest people are ending 2016 with $237 billion more than they had at the start in a year when populist voters reshaped power and politics across Europe and the U.S.
According to the Bloomberg Billionaires Index, the biggest fortunes on the planet whipsawed through $4.8 trillion of daily net worth gains and losses during the year, rising 5.7 percent to $4.4 trillion by the close of trading Dec. 27, triggered by disappointing economic data from China at the beginning, the U.K.’s vote to leave the European Union in the middle and the election of billionaire Donald Trump at the end.
“In general, clients rode through the volatility,” said Simon Smiles, chief investment officer for ultra-high-net-worth clients at UBS Wealth Management. “2016 ended up being a spectacular year for risk assets. Pretty remarkable given the start of the year.”
As his investment firm Berkshire Hathaway Inc. saw its airline and banking holdings soar after Trump’s surprise victory on Nov. 8, the gains were led by Warren Buffett, who added $11.8 billion during the year.
Two days after Trump’s victory ignited a year-end rally that pushed Buffett’s wealth up 19 percent for the year to $74.1 billion, the U.S. investor reclaimed his spot as the world’s second-richest person.
“2016’s been event-driven with global news driving prices rather than fundamentals,” said Michael Cole, president of Ascent Private Capital Management, which has about $10 billion of assets under administration. “The belief that Trump is going to come in and deregulate big parts of the economy is driving the markets right now.”
Including Microsoft Corp. co-founder Bill Gates, the world’s richest person with $91.5 billion, and oilman Harold Hamm, the individual gains for the year were dominated by Americans, who had four of the five biggest increases on the index.
Including Dallas Mavericks owner Mark Cuban, who told the media in May that stocks could fall as much as 20 percent if Trump were to win the election, the country’s richest were largely opposed to a Trump presidency during the election.
Adding $7.1 billion to take his fortune to $38.9 billion, France’s Bernard Arnault was the sole non-American representative among the five best performers. The Chinese luxury-goods market is improving, his LVMH Moet Hennessy Louis Vuitton SE said.
Throughout the year, Gates remained the world’s richest person.
Until he ceded it to Buffett in November, in second place on the index for most of the year was Amancio Ortega, Europe’s richest person and founder of the Zara clothing chain. World’s third-richest person with $71.2 billion is Ortega, who dropped $1.7 billion in 2016.
Despite worries that a Trump presidency might introduce policies that could hurt their companies, with 55 billionaires adding $50 billion to their fortunes over the year, technology fortunes were the second-best performing on the ranking.
“I think we’ll have to see what the policies of the administration are,” Google co-founder Sergey Brin told the media gathered on the red carpet of the annual Breakthrough Prize gala in Silicon Valley in December. “I certainly hope they will be pro-science, pro-technology and all the things this world has really benefited from.”
The founders of the world’s leading startups, such as Uber Technologies Inc.’s Travis Kalanick and Snap Inc.’s Evan Spiegel made some of the industry’s biggest relative gains. A series of mammoth funding rounds while moving closer to testing their fortunes on the public markets were secured by the so-called “unicorn” billionaires, which include Spotify Inc. co-founder Martin Lorentzon, who was identified as a billionaire for the first time in 2016.
Most fortunes outside of the U.S. were hurt by fluctuating commodities prices and the rise of the dollar and didn’t get the same boost from Trump’s victory. Led by China’s second-richest person, Wang Jianlin, who lost $5.8 billion, nine of the 10 biggest decliners in 2016 were from outside the U.S. With $30.6 billion, Wang ended the year as the world’s 21st-richest person.
With the country’s richest losing $11 billion in 2016 amid a slump in the Shanghai Shenzhen CSI 300 index and a 7 percent decline for the yuan against the dollar, wealth creation in China turned negative for the first time since the inception of the Bloomberg index five years ago.
Trailing the U.S.. which has 179 billionaires who control $1.9 trillion, and Germany, whose 39 individuals have $281 billion, Bottom of Form
China has 31 billionaires on the index with $262 billion.
(Adapted from Bloomberg)