With billionaires in Asia leading the pack, the world’s wealthiest individuals are on a roll.
UBS Group AG and PricewaterhouseCoopers said in a report issued Thursday that after a decline 2015, billionaire wealth increased 17 percent to $6 trillion in 2016.
And for the first time, the number billionaires from Asia surpassed the U.S. and this surge has been led by China.
However, at $2.8 trillion, American billionaires still control the most wealth.
Compared to the 8.5 percent increase of the MSCI AC World Index, the gain in total billionaire wealth was double.
A new billionaire was created in Asia every other day due to the region’s economic expansion. The Swiss bank and the auditing firm said in an analysis of data from roughly 1,550 billionaires that Asia would overtake the U.S. as the world’s largest concentration of wealth in four years should that pace continue.
UBS Chief Investment Officer Mark Haefele said at a press conference in Zurich on Thursday that how state-driven investment in China is replaced with other sources of capital how state-driven investment in China is replaced with other sources of capital will, in part, decide how fast billionaire wealth grows in Asia.
“As China hooks up its capital markets to the global system, it will have a very profound impact on capital flows — on Europe as well,” he said. He said that how fast total Asian billionaire wealth overtakes the US will also be influenced by the execution of Chinese President Xi Jinping’s growth policies.
The UBS report said, citing interviews with Asia’s richest people, that buoyant commodity prices, the growing middle class, infrastructure spending, rising Chinese real estate prices, and geopolitical stability in Greater China, were among the factors that combined to boost wealth.
India and China are the countries from where three-quarters of the world’s new billionaires hail. With self-made billionaires seeing their wealth rise faster than those who became rich through family ties, the number of Asia billionaires rose by 117 for a total of 637. The U.S. added 25 billionaires for a total of 563.
“In China, one billionaire is created every three weeks,” Qiong Zhang, head of wealth management for UBS Securities in China, said in an interview. “For many of the first generation of entrepreneurs, a major focus is bringing the business to the capital markets, raising funds and M&A,” she said, adding that the Swiss bank sees Greater China as a “crucial” wealth management market.
UBS said that in part due to death and because “entrepreneurial companies can find Europe a difficult place to do business due to both the conservative business culture and strict regulations,” Europe’s number was basically flat at 342.
According to the Bloomberg Billionaire Index, noting an increase of 19 percent, so far this year, $824 billion has been added by the world’s 500 richest people. Estimated at $5.2 trillion as of Oct. 25 is their total net worth.
“Informal and formal networks orchestrate deals and investments, as well as helping with other topics such as philanthropy, inheritance and art,” according to the report.
(Adapted from Reuters)
Categories: Economy & Finance