Led by China, Asia is creating a billionaire every three days.
During 2015, 113 Asian entrepreneurs attained billionaire status, representing 54% of the global total for the year.
The largest ever transfer of wealth to the Millennial generation is imminent. It will be Asia's first-ever handover of billionaire wealth.
With better education and access to technology, the new generation of ultra wealthy typically emphasizes social good and philanthropy, seeing business success as a means of benefiting society.
Hong Kong, 13 Oct 2016
- The 2016 Billionaires Report, jointly published by UBS and PwC today, shows that notwithstanding a slowdown globally, the number of billionaires increased in Asia, with majority in China.
With around 85% of Asia's billionaires being first-generation, the report anticipates the implications of the forthcoming transfer of wealth to the Millennial generation. The study focuses on more than 1,400 billionaires, looks back over two decades, and spans the 14 largest billionaire markets which account for around 80% of billionaire wealth globally.
"We are witnessing a departure from the status quo, with Asia leading the way in wealth creation. For Asia's billionaires, most of whom are first-generation, the transfer of wealth is important to create something that lasts for multi generations with continuity and family harmony. UBS has a relationship with three out of five billionaires in Asia and have been working with such families over generations and across the globe. UBS has developed a unique understanding of our clients needs and we join forces with them to create bespoke solutions which are tailored to their invidivual needs." said
Amy Lo, Head of Greater China, UBS Wealth Management and Country Head, UBS Hong Kong.
"In the last year, Asia has produced 113 new billionaires – more than half the global total. But many family businesses from Europe and more mature markets are in the fifth generation or older. 54% of Europe’s billionaires are multi-generational, as compared to 15% in Asia. Asian family businesses can learn a lot from their experience to help them establish models for wealth preservation and family governance and navigate through the challenging business environment,” said
Antoinette Hoon, Private Banking Advisory Services Partner, PwC Hong Kong.
Key themes for Asia
Asia is leading the way in wealth creation
Global wealth creation has been slowed by commodity price deflation and an appreciating US dollar. Aggregate total wealth for billionaires fell from USD 5.4 trillion to USD 5.1 trillion, even though there were 210 new billionaires in 2015.
Asia is leading the way in wealth creation. In 2015, Asia created a new billionaire every three days. Of the 210 new billionaires created, 113 billionaires were Asian entrepreneurs.
Nonetheless, Asia still faced economic challenges. Billionaire wealth across Asia fell by 6% from USD 1.6 trillion to USD 1.5 trillion. Far more billionaires lost their billionaire status in Asia than in Europe or the US.
China drives billionaire population growth in Asia
Spurred by accelerated economic evolution, China accounted for 80 of Asia's new billionaire entrepreneurs, which had an average age of 53. Almost half came from the technology, consumer and retail, and real estate sectors.
Hong Kong and India each created 11 billionaires.
The impending transfer of wealth to the next generation will be the largest to date globally and the first in Asia
Most of the world's billionaires generated their wealth in the last 20 years, and billionaire wealth has grown seven folds. However, one-third of the billionaires covered by the Report are over 70 years old. Collectively, they hold 40% of the total wealth of the group.
As such, the transfer of wealth to the Millennial generation will be the largest to date globally. For most of Asia's relatively young economies where 85% of billionaires are first-generation, this will be the first handover of wealth. Around 460 of the billionaires in the markets covered are expected to pass USD 2.1 trillion to the next generation in the next 20 years – a figure equivalent to India's GDP in 2015.
New generation brings fresh directions and potential challenges
The transfer has wide-ranging implications as many young multi-generation billionaires, while being empowered to revitalize their family businesses with creativity, also tend to emphasize social good and philanthropy, seeing business success as a means of benefiting society.
In any event, issues of family legacy and wealth preservation can be expected to become increasingly important.
Asian billionaires can learn valuable lessons from Europe's multi-generational wealthy
In line with the growing importance of legacy and wealth preservation, the study shows that Europe ranks first in terms of number of multi-generational billionaires, and is a close second to the US in terms of multi-generational wealth. Despite the continent's economic difficulties, European billionaires survived 2015 far better than peers in other markets, with their total wealth remaining almost unchanged at USD 1.3 trillion.
Asian billionaires can learn valuable lessons from their European counterparts, in terms of establishing models for wealth preservation and family governance.
Billionaire philanthropy is growing globally, especially in the Millennial generation
Billionaire philanthropy is growing all over the world, especially as the Millennial generation is putting philanthropy at the heart of their family's values.
In order to create a real impact in society and environment, they will be required to use strategic skills and smart risk taking, some of the characteristics billionaires apply to make their businesses successful. Society at large stands to benefit from this age of wealth creation but the extent to which it will benefit, will depend on how adeptly the younger generation approaches their social endeavours.
For the full report, go to: http://pwchk.com/home/eng/billionaire_report_oct2016.html
About the UBS-PwC Billionaires Report
The sources used to research and profile wealthy individuals were blended into a mosaic analytical framework from which extensive modeling and analysis was conducted. The information and data is part of PwC proprietary data and analytics structures and are non-commercial in nature and specifically non attributable regarding the identity of any underlying individual or family. PwC acts as a supplier of data and analysis for the purpose of this report. In addition the following were specifically used as a part of the research: