Total billionaire wealth fell by US$300 billion to $5.1 trillion in 2015, according to UBS Group AG and PwC’s joint annual billionaires report, “Are Billionaires Feeling the Pressure?”
Headwinds such as the transfer of assets within families, commodity price deflation and an appreciating US dollar, impacted the growth of billionaire wealth.
Average billionaire wealth dropped from $4.0 billion to $3.7 billion and the US added only five net new billionaires in 20151. In contrast, Asia produced one billionaire every three days, with China alone accounting for over half of the 113 additions.
Greatest transfer of wealth in human history
The findings build on UBS/PwC's previous Billionaires Reports, released in May and December 2015. According to the new report, we are about to witness the greatest transfer of wealth in human history.
Approximately 460 billionaires will transfer $2.1 trillion, the equivalent of India’s GDP, to their heirs over a period of just 20 years.
For most of Asia’s young economies, where over 85% of billionaires are first-generation, this will be the first-ever handover of billionaire wealth.
“The findings of this report help us stay ahead of the issues that matter to better advise our clients, which include over half the world’s billionaires and three out of every five billionaires in Asia,” according to Josef Stadler, Head Global Ultra High Net Worth, UBS.
Even as China’s growth moderates, it is the bright spot for great wealth growth.
Led by a tech sector on the rise, China minted 80 new billionaires in 2015 and Asia overall created a new billionaire nearly every three days.
Meanwhile Europe's billionaires stood out for maintaining and passing wealth down to their heirs.
"This is something that regions like Asia, where many more billionaires are first generation, can learn a lot from, especially as we head into the greatest period of wealth transfer we’ve ever seen,” says Stadler.
“Just as Asian billionaires can gain from the experience of wealth transfer in Europe, there’s much that Europe can learn from the rapid billionaire growth in Asia.”
Crucial for wealth preservation
Michael Spellacy, Global Wealth Leader at PwC US notes that the shockwaves from regulatory upheaval in the EU continue to trigger global currency fluctuations, strategic planning becomes even more crucial for wealth preservation.
“Encouragingly, this year's report shows that Europe's billionaires were the most resilient with many of the 60 individuals from Europe inheriting their fortunes in 2015 for the first time.
“The US, which boasts the biggest collection of billionaires by region, sets the trend. Total US billionaire wealth fell, but 'new money' fared better than old, falling by just 4%, from an average of $4.7bn per individual to $4.5bn,” says Spellacy.