Despite global economic uncertainties, the euro zone debt crisis, and fears of a hard landing in China, the mega-rich — the one percent of the one percent — have had a great year.
The world’s billionaire club has added to its numbers and increased its wealth even as equity, currency, and commodity markets have suffered one of their most volatile periods. The number of billionaires worldwide grew 9.4 percent to 2,160, expanding their wealth by 14 percent to $6.19 trillion — a $760 billion jump over the previous year, according to research firm Wealth-X
10. Canada
Billionaire count: 40
Total wealth: $105 billion with 40 billionaires
Canada is home to the eighth largest population of ultra-rich individuals, or those with $30 million or more in total assets. Billionaires account for only 0.8 percent of Canada’s ultra-rich population, but own nearly 18 percent of the combined wealth of $595 billion in this category. The country’s ultra-wealthy population, however, did see its combined wealth decrease by 4 percent between August 2011 and July 31, 2012, while the number of people in the group also fell nearly 4 percent. Weakness in the global equity markets and fears of the possible spill over effects from a slowdown in the U.S., which is Canada’s largest trading partner, are some of the major reasons behind the wealth’s decreasing fortunes, according to Wealth-X. For example, Canada’s richest person, billionaire media magnate David Thomson who along with his family owns Thomson Reuters, saw his and his family’s net worth fall by $5.5 billion in the year to March 2012 due to a nearly 30 percent drop in the company’s share price, according to Forbes. Thompson, 55, is now the 35th richest man in the world, down from 17th in 2011.
9. Brazil
Billionaire count: 49
Total wealth: $300 billion
Brazil is the only Latin American country to make the list of the top 10 countries with the most billionaires, even though the region’s ultra-wealthy population increased by 3.5 percent this year. Brazil ranks ninth in the world for its ultra-rich population of 4,640. These are people who are worth $30 million and more. The combined wealth of Brazil’s billionaires account for more than a third of its ultra-rich group wealth of $865 billion, even though they represent only one percent of that population. The number of billionaires in Brazil, meanwhile, fell by just one this year, but the group’s combined wealth decreased by more than 6 percent. On average, Brazil’s 49 billionaires are worth $6.1 billion each. However, the wealth of the country’s richest man, Eike Batista, is more than double that figure at $14.9 billion, according to Forbes. A sharp dip in the country’s gross domestic product growth from 7.5 percent in 2010 to 2.7 percent in 2011 is one of the key factors behind the drop in wealth, as Europe’s debt crisis eroded demand for its exports. Equity markets in Brazil also fell by 10 percent in the 12-month measuring period starting August 2011, while the local currency, the real, devalued by 31 percent, according to Wealth-X.
8. Switzerland
Billionaire count: 57
Total wealth: $125 billion
Known as the playground of the rich and famous, Switzerland is eighth in the global billionaire sweepstakes and ranks seventh as the home of those worth $30 million and more, or the ultra-wealthy. Switzerland’s billionaires represent the top one percent of its 5,597 ultra-wealthy population and control more than 19 percent of the total fortune of this group. On average, these billionaires are worth $2.2 billion each. Despite Europe as a whole seeing a decline in its ultra-wealthy population, Switzerland’s rich grew more than 7 percent. Their combined wealth increased more than 3 percent year-over-year. The country’s favorable tax and privacy laws have attracted a number of ultra-rich people, who keep their money there even though they don’t permanently live in the country. Such individuals made up more than 18 percent of Switzerland’s ultra-wealthy population. Other factors contributing to the increase in wealth in Switzerland was a 15 percent rise in its equity markets in the 12 months ending July 31 2012, outweighing limited economic growth of 1.9 percent in 2011, according to Wealth-X. Those gains, however, were capped by the fall in the Swiss franc, which declined more than 24 percent in that period.
7. Hong Kong
Billionaire count: 64
Total wealth: $190 billion
As one of Asia’s key financial centers, Hong Kong is also home to some of the richest people with a billionaire count of 64. Billionaires in Hong Kong make up 2 percent of the city’s ultra-wealthy population, but account for more than 40 percent of the group’s combined wealth. The ultra-wealthy are those with assets worth $30 million or more. Slowing economic growth across North Asia has had a direct impact on Hong Kong’s 3,135 ultra-rich people. The total wealth of this group dropped around 11 percent, while their numbers fell 2 percent to 470 between August 2011 and July 2012, keeping with a trend seen across Asia. Hong Kong’s richest man, 84-year-old billionaire Li Ka-shing — who is also the richest individual in Asia and the ninth richest in the world — saw his fortune decline. Li Ka-shing’s net worth fell to $22 billion in May from $25.5 billion in March this year, according to Forbes. The majority of Hong Kong’s top 10 billionaires are involved in the property sector and have in recent years benefited from mainland Chinese demand for the island’s real estate. But a slowdown in China this year has dampened demand, weighing on the city’s property companies.
6. Russia
Billionaire count: 97
Total wealth: $380 billion
Russia comes in at sixth for the most billionaires, despite its ultra-rich population seeing the biggest erosion in wealth this year among the countries in this list. Billionaires account for 8.5 percent of the country’s ultra-rich individuals, or those worth $30 million and more, but control more than 60 percent of the group’s combined wealth. The number of billionaires in Russia increased by 17 from last year, but their total wealth fell by nearly 29 percent. For ultra-rich individuals, their combined wealth fell nearly 15 percent to $605 billion between August 2011 and July 31 this year, and their numbers fell by 145 to 1,145. This marks a decline of more than 11 percent, which is higher than Europe’s average decline of 1.9 percent. This year’s drop in wealth creation is a complete reversal from last year, when its capital city Moscow was called the billionaire capital of the world by Forbes. The magazine reported that the country’s billionaire count had jumped from 62 to 101 between 2010 and 2011, with 79 of them in Moscow. The commodities boom that has been fueling this wealth has since softened, leading to a decline in wealth creation. Russia’s richest, steel tycoon Vladimir Lisin , saw his fortune drop by $8.1 billion in the year to March 2012. Lower steel prices led to a 45 percent fall in his firm Novolipetsk Steel’s share price, according to Forbes.
5. India
Billionaire count: 109
Total wealth: $190 billion
India, together with its BRIC peers — Brazil, Russia, and China — makes a big part of the top 10, highlighting the scale of wealth being created in emerging economies. Asia’s third largest economy, together with Japan and China, accounts for about 75 percent of the region’s ultra-rich population. Billionaires in India make up 1.4 percent of the total ultra-rich, or those with $30 million in assets, and control more than 20 percent of the combined fortune of this group. On average, Indian billionaires are worth close to $1.7 billion each. They have seen their total wealth decline over 7 percent in 2012 from last year, while their population has fallen by more than 5 percent. The lower numbers reflect a broader trend of declining wealth in India, as its ultra-rich population saw the biggest drop in the world with 485 people leaving the ranks of the ultra-wealthy. They also lost nearly 6 percent of their total fortune, compared to the previous year. Some of the major factors behind the decline in wealth are the volatility in the Indian stock market and the depreciation in the Indian rupee. Slowing economic growth and infrastructure bottlenecks have also plagued investment in the country. The Indian economy grew at its slowest pace in almost three years in the second quarter of this year.
4. Germany
Billionaire count: 137
Total wealth: $550 billion
Germany is the only euro zone country to make the list of the most billionaires, bucking the trend of declining wealth in the majority of the bloc’s nations. The country’s 137 billionaires account for less than 1 percent of the ultra-high net worth group, but control nearly 27 percent of the total fortune in the segment. The ultra-rich are those that have $30 million or more in assets. German billionaires are worth $4 billion each on average, and the three cities with the maximum number of ultra-rich are Munich, Dusseldorf, and Hamburg. A nearly three percent fall in its equity market and a 13 percent drop in the value of the euro during the period between August 2011 and July 2012 did little to knock off wealth creation in Germany, according to Wealth-X. In Europe’s largest economy, the combined wealth of the ultra-rich group grew by 5.3 percent from the previous year, even as their numbers fell 1.4 percent.
3. United Kingdom
Billionaire count: 140
Total wealth: $430 billion
The United Kingdom has the largest number of billionaires in Europe, beating Germany by three, but it still lags in terms of total wealth of the group by $120 billion. Its billionaires account for 1.3 percent of the ultra-rich population. They also hold nearly 33 percent of the total fortune of this group of ultra-rich. On average, these billionaires are worth $3.1 billion each. The ultra-rich’s wealth grew by nearly 4 percent compared to the previous year, while its numbers grew by 0.2 percent. The U.K.’s ultra-rich population has benefited from the perception that the country is a safe haven for wealth amid the region’s uncertain economic conditions. More than a third of U.K.’s ultra-rich comprises non-domiciled residents. There is also diversity in U.K.’s ultra-wealthy population with Caucasians making up almost 62 percent, followed by South Asians at 28 percent, and people of Chinese, North Asian, and Middle Eastern descent accounting for more than 8 percent, according to Wealth-X. The real estate sector has been one of the biggest beneficiaries of foreign wealth. 65 percent of the Central London office market were purchased by foreign investors in 2011, according to Jones Lang LaSalle. However, the prospect of a recession this year and a worsening euro zone crisis could reverse the current wealth inflows from risk-averse Europeans, according to Wealth-X.
2. China
Billionaire count: 147
Total wealth: $380 billion
China ranks second in the world when it comes to the number of billionaires, but in terms of total wealth, the country is behind Germany and the U.K., tying with Russia for fourth spot. Billionaires account for 1.3 percent of those with $30 million or more in the world’s second biggest economy, while they control over 24 percent of the group’s $1.58 trillion wealth. On average, Chinese billionaires are worth almost $2.6 billion each and the top five cities with the most ultra-rich people are Beijing, Shanghai, Shenzhen, Guangzhou, and Hangzhou. In the past year, however, Chinese billionaires have lost nearly a third of their wealth , down to $380 billion from $540 billion in the previous year. The slump in wealth reflects the overall trend in the region, with Asia’s ultra-rich seeing the biggest drop in wealth compared to anywhere else in the world. Poor performance of China’s equity market, with the Shanghai Composite Index falling 20 percent over August 2011 to July 2012, was one of the main reasons for the drop in wealth. Individuals holding manufacturing assets and real estate in China’s coastal provinces were the hardest hit, as factory production moved inland because of high labor costs, according to Wealth-X.
1. United States
Billionaire count: 480
Total wealth: $2.05 trillion
The United States still leads the world with its billionaire tally, far outpacing its closest competitor China with a whopping 333 more billionaires. Despite the economic headwinds, the U.S. minted 25 new billionaires in the past year — a 5.5 percent increase from the previous year. Their combined wealth also grew nearly 8 percent from the previous year to $2.05 trillion. American billionaires account for less than 1 percent of the ultra-rich population, but control nearly a quarter of the group’s total fortune of $8.28 trillion. On average, these billionaires are worth $4.3 billion each. The country’s ultra-rich saw a more than 3 percent increase in wealth, while the group’s population grew by nearly 4 percent, compared to last year — outpacing U.S. GDP growth. California is the number one state for the ultra-wealthy, followed by New York, Texas, Florida, and Illinois. A major driver of wealth for the ultra-rich was the U.S. equity markets, with the S&P 500 index up over 7 percent between August 2011 and July 2012. As a result, 2,250 people joined the ranks of the ultra-rich club in the past year. Despite the fast pace of growth in America’s ultra-rich numbers, Wealth-X projects that Asia’s ultra-wealthy population will surpass that of the U.S. by 2025, while their combined wealth will overtake them by 2020.
RQ Score In 2013: 81.32, Position: 4
Ankit Shah's Blog 