Opportunities galore for growing number of billionaires

Indian billionaires' cumulative wealth had touched the $ one trillion milestone. According to the 2024 Hurun Global Rich List, China topped the list with 814 billionaires. However, its ultra-rich list was reduced by 155 from 2022 as the country witnessed turmoil in the real estate and renewable energy sectors. The US came second with 800 billionaires, adding 109 new members. Newly minted wealth will be put to work with investors targeting capital growth (31% of respondents), capital preservation (26%) and income generation (23%). Expect increases in investment allocations, with almost a third of investors looking at property to provide an inflation hedge and diversification. A cautious approach will see 29% of investors reduce debt volumes. Overall, the US accounted for 37% of the global rich list, which ranked 3,279 people from 73 countries. The number of billionaires recorded a growth of five per cent and their total wealth rose by nine per cent. The total wealth held by UHNWIs shrank by 10% during 2022, a drop of some $10.1 trillion. Europe saw the largest decline in wealth with a drop of 17%, followed by Australasia with 11% and the Americas by 10%. Africa and Asia by comparison saw the smallest declines with five per cent and seven per cent.

Almost half of HNWIs hoped for increase in their portfolio in 2023. For the first time in over a decade, the return on cash has gone from sub-1% to more than 4% in the US: as a result, 46% are looking to increase cash reserves.

The flip side is that, with rising interest rates, 29% are looking to reduce debt levels and only 27% to take on more. While the UK, EU and the US, still attract many globally footloose wealthy residents, it is undeniable that Singapore and Dubai are emerging as critical wealth hubs. The latter has evolved a very pragmatic approach to attract wealthy residents – length of stay. “Wealthy investors are now increasingly focussed on ethical investing, backing companies and causes that align with their values like clean energy and social enterprises,” according to Nathan Jacobs, senior researcher at The Money Mongers. The 2023 UBS Billionaire Ambitions Report states that “This is not just for do-gooding but also for financial upside in fast-growing areas. A majority of billionaires who accumulated wealth in the past year did so through inheritance as opposed to entrepreneurship”.

The next generation has fresh views about business, investing and philanthropy, redirecting large pools of private wealth to new business opportunities arising from the times we live in. The study found that many billionaires are passing their wealth on to the next generation, and for the first time in nine editions of this report the next generation of billionaires accumulated more wealth through inheritance than entrepreneurship. Approximately, 53 heirs inherited a total of $150.8 billion over the past year, compared with the 84 new self-made billionaires’ total accumulation of $140.7 billion. Meanwhile, 68 per cent of billionaires with inherited wealth said they intend to continue and grow what their parents achieved in business, brand or assets, 63 per cent heirs want to enable future generations to benefit from their wealth and 32% said they will follow their parents’ predefined philanthropic goals.