Half of new billionaires in Asia but Europeans fare best

Added 14th October 2016

Led by China, Asia created one billionaire nearly every three days and accounted for over half of new billionaires in 2015 despite global billionaire wealth declining last year by $300bn to $5.1trn, according to a joint UBS Group and PwC report.

Half of new billionaires in Asia but Europeans fare best

The average wealth of the world’s approximately 460 billionaires also decreased to $3.7bn from $4bn the previous year.

The primary drivers for this were the transfer of assets within families, commodity price deflation, and the appreciating US dollar.   

Europeans have proven the most resilient at preserving their fortunes, accounting for 54% of global multi-generational billionaires, followed by the US with 33% and APAC with 15%.

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.

Billionaires around the world will transfer $2.1trn, the equivalent of India’s GDP, to their heirs over a period of just 20 years.

"Total US billionaire wealth fell, but 'new money' fared better than old, falling by just 4%, from an average of $4.7bn per individual to $4.5bn.”

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.

Europe: a model to follow

Of the 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.

Asia: a wealth growth hotspot

Josef Stadler, head global ultra-high net worth at UBS, said: “The findings of this report help us stay ahead of the issues that matter to better advise our clients, which include over half the world’s billionaires and three out of every five billionaires in Asia. Even as China’s growth moderates, it is the bright spot for great wealth growth.

“Led by a tech sector on the rise, China minted 80 new billionaires in 2015 and Asia overall created a new billionaire nearly every three days. Meanwhile Europe's billionaires stood out for maintaining and passing wealth down to their heirs.

“This is something that regions like Asia, where many more billionaires are first generation, can learn a lot from, especially as we head into the greatest period of wealth transfer we’ve ever seen. Just as Asian billionaires can gain from the experience of wealth transfer in Europe, there’s much that Europe can learn from the rapid billionaire growth in Asia.”

US: new money fares better

Michael Spellacy, global wealth leader at PwC US, said: “As the shockwaves from regulatory upheaval in the EU continue to trigger global currency fluctuations, strategic planning becomes even more crucial for wealth preservation. Those who control assets face tough investment questions.

“Encouragingly, this year's report shows that Europe's billionaires were the most resilient with many of the 60 individuals from Europe inheriting their fortunes in 2015 for the first time.

“The US, which boasts the biggest collection of billionaires by region, sets the trend."

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