The latest study of high net
worth wealth by Capgemini and Merrill Lynch says that the
population of high net worth individuals grew by 8.3 percent last
year to 9.5 million, spurred largely by emerging wealth across
Asia-Pacific. The research concludes that global high net wealth
will grow to $51.6 trillion by 2011
In four years’ time, by 2011, the
wealth held by high net worth individuals (HNWIs) in the
Asia-Pacific region will be more than that held by HNWIs in Europe:
$12.7 trillion compared to $12.5 trillion.
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By GlobalDataThe increasingly rapid rise of wealth across the Asian continent
is one of a number of points to come out of the latest
Capgemini/Merrill Lynch World Wealth Report. The study also found
that in 2006, the greatest growth in the number of HNWIs (defined
as individuals with net assets of at least $1 million excluding
their main residence and consumer goods) were in Singapore and
India, where numbers advanced by 21.2 percent and 20.5 percent,
respectively.
The report concludes that global wealth continued to consolidate in
2006, with the assets of the world’s wealthiest individuals
accumulating at a faster rate than the growth of the overall HNWI
population (the Middle East was the notable exception). Globally,
the population of HNWIs – those with $1 million plus in personal
net assets – grew by 8.3 percent last year to total 9.5 million
individuals, spurred by emerging wealth in countries in Asia.
Indeed, the study found that the continued growth of HNWI wealth
has been driven to a significant degree by the wealthiest sector of
the HNW market – the ultra-HNWIs, people with assets over $30
million. In 2006, the number of ultra-HNWIs grew to 94,970
globally, an 11.3 percent gain, up from a 10.2 percent gain in
2005.
Overall, total HNWI wealth in all segments in 2006 grew by 11.4
percent over the previous year to $37.2 trillion in financial
assets, a significant gain over the 8.5 percent in 2005 and 7.8
percent in 2004. Wealth growth in 2006 outpaced HNWI population
growth by 3.1 percentage points, meaning the rich got even
richer.
Taking a rosy economic scenario for the world for the immediate
future, Capgemini and Merrill Lynch forecast that global HNWI
financial wealth will grow to an estimated $51.6 trillion by 2011,
at an annual rate of 6.8 percent.
Two primary drivers
The growth of real GDP and securities market
capitalisation – the two primary drivers of wealth generation last
year, according to Capgemini and Merrill Lynch – accelerated
throughout 2006, helping to increase the total number of HNWIs
around the world as well as the amount of wealth they
control.
Spurred by higher oil and metals prices, gains were particularly
strong in Latin America, Africa and Asia-Pacific, where 2006 HNWI
wealth grew by 23.2 percent, 14.0 percent and 10.5 percent,
respectively. In the Middle East, total HNWI wealth grew by 11.7
percent in 2006, while the overall HNWI population grew by 11.9
percent, which suggests a healthy dispersion of wealth in the
region.
The two regional Asian superpowers of China and India sustained
real GDP growth rates of 10.5 percent and 8.8 percent,
respectively, which were among the highest of any economy in the
world. Certain areas of Latin America and Eastern Europe also
enjoyed real GDP growth rates that outperformed the global average
of 5.4 percent, including Russia with 6.6 percent growth.
In Asia-Pacific, the overall HNWI population grew by 8.6 percent in
2006, up from 7.3 percent in 2005. The region’s wealth grew by 10.5
percent in the same period. The HNWI populations of Singapore,
Indonesia and Taiwan all enjoyed double-digit growth in 2006.
By contrast, in the US, which was restrained by recurrent interest
rate hikes, real GDP growth stayed virtually unchanged at 3.3
percent. Despite static GDP in the US, the ranks of North American
HNWIs swelled by 9.2 percent in 2006 compared with 6.9 percent in
2005. This growth helped solidify North America’s first-place
ranking in both the number of resident HNWIs and the size of their
accumulated assets. In the US alone, the HNWI population expanded
by 9.4 percent in 2006, up from 6.8 percent in 2005.
In Europe, several years of healthy market capitalisation growth
helped the region’s HNWIs grow both in number and accumulated
wealth. The HNWI population grew by 6.4 percent in 2006, building
on the 4.5 percent gains logged in 2005. Total HNWI wealth in
Europe grew to $10 trillion, a 7.8 percent gain, compared with 4.9
percent in 2005.
In Germany, the HNWI population grew by 4.1 percent in 2006, a
substantial increase from 0.9 percent in 2005, one of the slowest
growth rates in the world that year. Wealth creation was also
positive in France, where the total HNWI population climbed by 6.0
percent. In the UK, the HNWI population grew by 8.1 percent in
2006, substantially higher than the 7.3 percent growth seen in
2005.
