UBS/PwC Billionaires Report 2018: Total billionaire wealth grows 19 percent to a record USD 8.9 trillion

Chinese entrepreneurs lead the way as billionaires globally add USD 1.4 trillion to their wealth in 2017, the greatest annual increase ever 

Key findings:

  • Despite underperforming against the MSCI World Index, billionaires grew their wealth by 19 percent to an unprecedented USD 8.9 trillion in 2017.
  • Growth was spurred by Chinese billionaires, who increased in number to 373 and whose wealth rose by 39 percent to USD 1.12 trillion. This compares to an overall growth rate of 32 percent in APAC.
  • China produced 106 new billionaires in 2017, which represents more than two Chinese billionaires minted each week.

Beijing, 26 October 2018 – Billionaires’ wealth enjoyed its greatest-ever increase in 2017, rising 19 percent to USD 8.9 trillion shared among 2,158 individuals. Despite healthy growth in the Americas and Europe, Chinese billionaires led the way, growing their wealth by 39 percent to USD 1.12 trillion.

Today, Asia Pacific is home to 814 billionaires representing 38% of the global billionaire population. In Asia Pacific, 177 billionaires were minted during the year, largely driven by China.

Here in this region, over three new billionaires were created in a week, with China leading the way minting over two new billionaires in a week. This means that more than half of new billionaires worldwide is contributed by Asia. Driven largely by China, APAC billionaires’ net worth grew by almost a third (32%) to USD 2.7 trillion in 2017. At this rate, APAC billionaires are expected to be wealthier than their American peers in less than three years. Many of the APAC billionaires made their wealth in the consumer & retail, technology and real estate sectors.

These findings were published today in UBS and PwC’s joint, annual Billionaires Insights report, New Visionaries and the Chinese Century. Now in its fifth edition, the report draws on UBS and PwC’s extensive client network and access to data, and aims to promote a deeper understanding of the billionaire population globally.

Josef Stadler, Head of Ultra High Net Worth at UBS Global Wealth Management, comments on the new report: “Over the last decade, Chinese billionaires have created some of the world’s largest and most successful companies, raised living standards. But this is just the beginning. China’s vast population, technology innovation and productivity growth combined with government support, are providing unprecedented opportunities for individuals not only to build businesses but also to change people’s lives for the better.”

“We are experiencing a new wave of entrepreneurship worldwide, with billionaires at the vanguard of innovating. They are creating jobs and prosperity, but their impact goes beyond economics. A new generation is emerging, and they see an opportunity to tackle some of the greatest environmental and societal challenges facing humankind.”

Qiong ZHANG, President and Head of Wealth Management, UBS (China) Limited, commented, "China continues to mint 2 billionaires every week, powered by continued economic growth. This kind of remarkable wealth creation presents an immense opportunity for UBS, which currently already has a relationship with three out of five billionaires in Asia. As we continue to build our capabilities in serving billionaire clients, we apply a holistic approach that not only serves their business and investment needs, but succession, philanthropy and family legacy needs."

James CHANG, Financial Services Consulting Leader, PwC China, commented: “China’s innovation activities are transforming from business model innovation to fundamental technology innovation. Looking ahead, China’s young entrepreneurs are set to swell the ranks of the world’s billionaires for years to come. Supported by rapid urbanisation and productivity growth, they are leveraging emerging technologies to revolutionise the country’s services sector, as well as enabling and growing businesses in areas such as financial services, retail and healthcare. The pace of growth will fluctuate, depending on the economic cycle, financial liquidity and whether the US/China trade war escalates.”
 

Key APAC findings:

Continuing a major trend highlighted last year, the rise of Asian billionaires carries on unabated:

  • There were only 16 Chinese billionaires as recently as 2006. Today, only 30 years after the country’s government first allowed private enterprise, they number 373 – nearly one in five of the global total.
  • 97% of the total Chinese billionaires in 2017 were self-made, many of them in sectors such as technology and retail.
  • China produced 106 new billionaires in 2017, which represents more than two Chinese billionaires minted each week. China has overtaken US as the place where wealth is created at the fastest rate.
  • Billionaires from Asia are now challenging the US’s traditional dominance in technology entrepreneurialism. In 2017, they equalled America’s level of venture capital funding for start-ups, and registered four times as many Artificial-Intelligence-related patents and three times as many blockchain and crypto-related patents as their US counterparts. China produced 50 unicorns from 2016 to 2018, just slightly behind 62 in the US.
  • Over 9 in 10 of Asia Pacific billionaires are first generation and self-made.
     

Key global findings:

Globally, billionaires continue to have a transformative effect on the world:

  • They have driven 80 percent of the 40 main breakthrough innovations over the last 40 years. 1
  • In 2017, a total of 199 entrepreneurs became self-made billionaires, including innovators in the fields of blockchain, peer-to-peer lending, genomics and green energy.

 

The report also examines how billionaires and their families are changing:

  • Over the next 20 years, 40 percent of current billionaire wealth (USD 3.4 trillion) will transition to a new generation.
  • These younger billionaires are the driving force behind a growth in philanthropy and sustainable investing, as they use their wealth to create positive social impact. More than one third (38%) of family offices are now engaged in sustainable investing, and almost half (45%) plan to increase their sustainable investments in the next 12 months.
  • Young billionaires are also looking to create their own economic value. Nearly two thirds (62 percent) of billionaires’ sons and daughters who inherited the family business in 2017 sought to become entrepreneurs, compared with 42 percent who inherited assets.

 

Billionaire wealth in numbers:

  • Global billionaire growth of 19 percent was lower than growth in the MSCI World Index, which rose by 25 percent. The biggest growth sectors were consumer & retail, which rose by USD 360 billion, technology (USD 250 billion) and materials (USD 180 billion).
  • The Americas region is still home to the largest concentration of billionaire wealth, which in the US grew by 12 percent to USD 3.1 trillion, powered particularly by the technology and consumer & retail sectors. But wealth creation is slowing, with the US creating just 22 new billionaires in 2017, compared to 87 five years ago.
  • In Europe, wealth grew 19 percent to USD 1.9 trillion. This was largely due to currency appreciation in the euro versus the dollar. In fact, the number of billionaires in the region only grew by 4 percent. Wealth transition from just five families accounted for 30% of the continent’s wealth expansion.

 

To download the report and previous reports, please visit: www.ubs.com/billionaires
 

1 Sources: Wharton School of Economics, ”A World Transformed: What Are the Top 30 Innovations of the Last 30 Years“ (2009); Massachusetts Ins

 

 

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