New research into high net worth populations confirms
that global wealth is increasing and
Asia-Pacific is at the forefront of the wealth-creation race. Farah
Halime analyses two new studies on high net worth individuals that
attempts to gauge where Asia-Pacific’s wealthy are
heading.
Go deeper with GlobalData
The wealth of 4.4bn adults across the globe has jumped 72% in
the last decade and is forecast to grow a further 61% by 2015.
Credit Suisse’s first Global Wealth Report predicts global
wealth will reach $315trn in the next five years from $195trn in
2010. At the top of the wealth pyramid, there are more than 1,000
billionaires globally, of which 245 are in Asia-Pacific, 230 are in
Europe and 500 are in North America. 
Moving down the wealth pyramid,
there are 80,000 ultra high net worth individuals (UHNWIs), or
those with average wealth of $50m or more.
Of the 24m other high net worth
individuals (HNWIs) – those with average wealth of $1m or more –
just over 800,000 are in China, around 170,000 are in India and
more than 4m are in the rest of Asia-Pacific.
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By GlobalDataChina in third
spot
China stands out as the
third-largest wealth generator in the world, behind only the US and
Japan, and is 35% ahead of the wealthiest European country,
France.
The report reiterates Asia-Pacific
as a driving force of the world’s wealth. Asia-Pacific economies
have proved to be the most resilient in the world, helped in
particular by strong GDP growth in China and India.
A stream of private banks has
recently targeted the region as a potential gold mine for tapping
into the HNWIs market.
UBS UHNW drive
UBS, the world’s third-largest
private bank, has revealed plans to grow assets in UHNWI segment
twice as fast as the market.
UBS global head for UHNWIs Josef
Stadler, says: “We are the market leader and so we command an
ambition to grow two times the market, which is above 7% to 8%
annually in terms of invested assets.”
Stadler says Asia accounts for
about 30% of assets belonging to the very rich, and is becoming
increasingly popular in terms of wealth management.
In a similar move, JPMorgan intends
to triple private banking assets in Asia over the next five years.
The bank’s private banking chief executive, Douglas Wurth, says the
bank plans to generate about 50% of its non-US business from Asia,
up from 20%.
This month Merrill Lynch/Capgemini
released data that showed a 25.8% and 30.9% increase in
Asia-Pacific HNWIs’ population and wealth during 2009.
India and Hong Kong the
fastest risers
By the end of 2009, the
Asia-Pacific Wealth Report says, the wealth of the 3m
Asia-Pacific HNWIs totalled $9.7trn.
The region’s UHNWIs population and
its wealth expanded 37% and 43% respectively in 2009. India and
Hong Kong witnessed the biggest growth of HNWIs in Asia-Pacific in
2009, reversing losses made at the height of the downturn.
Japan retained its number one spot
as the largest single market for HNWIs in the region. Japan alone
accounted for 54.6% of Asia-Pacific HNWIs, down only marginally
from 56.8% in 2008 and 40.3% of wealth at the end of 2009.
China also held onto its position
as the second-largest HNWI-base in the region, with 477,000 HNWIs,
up 31.0% from the previous year.
Equities and real estate
favoured
The report singled out equities and
real estate as specific areas for growth. Equity market
capitalisation surged 73.6% to $16trn during 2009 (from a 53.5%
decline in 2008) and housing prices recovered after incurring heavy
losses during the crisis.
Looking ahead, the report forecasts
Asia-Pacific economic growth to outpace the rest of the world in
2010 and 2011.
China and India are singled out as
likely to experience the fastest growth in HNWIs population
growth.
Sceptic questions
figures
But sceptics question the accuracy
of reports such as Merrill Lynch/Capgemini’s Asia-Pacific
Wealth Report.
Richard Williams, director at UK
consultancy MDRC, says Merrill’s report should be “taken with a big
pinch of salt” and there is no correlation with an individual’s
total assets and investable assets.
Williams says data is derived from census figures about the
distribution of income in a country.
This often incorrectly identifies the source and use of an
individual’s wealth, but this varies wildly. MDRC, which released a
European wealth report this month, did not include figures for
HNWIs and UHNWIs wealth for this reason.
