World wealth report: Millionaires richer than before downturn

23rd June 2011

World wealth among those with $1m of investable assets or more rose to $42,700bn in 2010, up from $40,700bn, or a rise of nearly 10%, from 2007, according to the Merrill Lynch Cap Gemini World Wealth Report.

According the Financial Times (paywall) rising equity markets and Asian growth helped expand the fortunes of the global elite, with the number of Asian millionaires now exceeding that of Europe.

There were 3.3m millionaires in Asia-Pacific at the end of 2010, says the report, compared to 3.4m in the US and just 3.1m in Europe. There were 3m millionaires in both Europe and Asia at the end of 2009.

The Guardian says: "We are not all in this together. The UK economy is flat, the US is weak and the Greek debt crisis, according to some commentators, is threatening another Lehman Brothers-style meltdown. But a new report shows the world's wealthiest people are getting more prosperous – and more numerous – by the day.

"The globe's richest have now recouped the losses they suffered after the 2008 banking crisis. They are richer than ever, and there are more of them – nearly 11 million – than before the recession struck.

"In the world of the well-heeled, the rich are referred to as "high net worth individuals" (HNWIs) and defined as people who have more than $1m (£620,000) of free cash."

The report also considers a category of "ultra-high net worth individuals" with around $30m. The number of individuals in this super-rich bracket climbed 10% to a total of 103,000, and the total value of their investments jumped by 11.5% to $15tn.

More than eight out of 10 of the world's wealthiest people are aged over 45, and women make up just over a quarter of the total. The highest proportion of wealthy women is in North America – 37% of HNWIs – while the lowest is in the Middle East, which has 14%.

HNWIs are most concentrated in the US, Japan and Germany, with 53% of the world's most wealthy live in one of those three countries. However, it is Asian-Pacific countries where the ranks of the rich are growing at the fastest rate.

This scale of wealth of the richest people in Asia Pacific, aided by the fast-growing economies in China and India, is now threatening to overtake North America, where the value of the wealth rose more slowly – 9% – to reach $11.6tn.

So what are the wealthy doing to boost their portfolios? The performance of investments made by wealthy individuals in shares and commodities, and their willingness to take more risks, helps drive their wealth, according to the Guardian.  

The richest people in the Asia-Pacific region have also fared better since the crisis. Their wealth is now up 14.1% since 2007 – compared to individuals in North America and Europe who are yet to recoup the losses they suffered during the banking crisis.

Ian Cowie in the Daily Telegraph report adds: "To make matters worse, Britain is falling behind the rest of Europe due to a depreciating currency, falling house and share prices coupled with low interest rates and rising unemployment."

Truth47 comments on the report: "It's not really about those at the top, it's about an economy collapsing as wages are collapsing – until protectionism is finally introduced the UK economy will continue to be an absolute race to the bottom for most people…"

The growth in the number of rich individuals in the UK was among the slowest in the top 10 nations, showing a 1.4% rise to 454,000 and remaining below the 495,000 recorded in 2007.

The report said that while the UK stock market rose almost 30% and GDP grew 1.3% – after contracting by 4.9% in 2009 – the fortunes of the rich were held back by falling house prices and the rise in unemployment.

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