Acceleration of UHNW population growth in 2021 – Knight Frank

The number of ultra-wealthy people has increased significantly in 2021 and the numbers are expected to continue to rise, the company said in its annual Wealth and Fresh Money Drivers Overview.

The global population of ultra-high net worth people – those with $30 million or more – grew 9.3% last year, accelerating from a 2.4% growth rate recorded over the last year. pandemic-hit year 2020, real estate consultant Knight Frank said. .

The figures, which come from Knight Frank’s annual Wealth Report, also indicate that Asia is on track to overtake Europe as the second largest wealth management market behind North America. This development, echoed in other global reports from groups such as Capgemini, explains why so many Western banks have built private banking and wealth management businesses in Asia, even at a time of US-China tensions over trade and other questions.

The company’s wealth sizing model, which it uses to make forecasts, leads it to predict that between 2021 and 2026, the global UHNW population will grow by another 28%. In the ten years to 2026, this is more than double the number of UHNW individuals worldwide – from 348,355 to 783,671.

Knight Frank said its attitude survey, conducted among wealth advisers and private bankers, showed 82% of them said client wealth had increased in 2021, with more than half describing the rise as “significant” (defined as more than 10 percent). Over the past five years, the previous peak in optimism was in 2017, when 72% of survey respondents said customer wealth had increased. The global UHNW population grew by 10%, benefiting from generally favorable economic conditions.

Although economic conditions have changed as a result of the pandemic, the only region to have experienced a decline (-0.8%) in its UHNW population is Africa.

“Rising asset prices, from real estate markets to stock markets to luxury collectibles, have all contributed to soaring the fortunes of those wealthy enough to hold investment portfolios,” the report said. .

The top five winners for UHNW, in absolute terms, were the US, UK, France, Japan and Mainland China. Stock markets have been driving some changes: the French CAC 40 is up around 30% in 2021, the US S&P 500 is up over 25% and the UK FTSE 250 is up around 15% .

Knight Frank was understandably delighted that his survey showed that, on average, just under two-thirds of UHNW wealth is allocated to property. Just under a third of total wealth is held in primary and secondary residences, while the rest is invested directly or indirectly (through real estate investment trusts (REITs), for example) in investment properties .

By 2026, Knight Frank estimates that Asia will overtake Europe as the second regional wealth hub. During this period, he predicts, for example, that Singapore will have seen a 268% growth in its UHNW population to around 6,000. However, the 10-year growth is led by Australasia. The region’s UHNW population, led by New Zealand (from 1,249 to 4,618), is expected to more than triple by 2026, he said.

Among other details, Knight Frank said he estimated that 129,557 UHNW people were self-made and under the age of 40; almost a fifth of the total population.

“North America, at 44,751, has the largest cohort, but Asia’s slightly lower total of 44,565 represents a higher proportion – 26% – of the region’s super-rich,” he said. -he declares.

The report says Russia “has the highest relative number of next-generation wealth creators, with 45% (2,923) of its UHNWIs falling into the category” – these numbers were captured before massive economic sanctions hit. be imposed on Russia a few days ago for its invasion of Ukraine.

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