Wealth Flocks East As Asia Counts More Billionaires Than US For First Time - UBS

Josh O'Neill

27 October 2017

Asian billionaires now outnumber their American counterparts, but the US still has the greatest concentration of wealth, according to a report published yesterday by .

Last year, a new billionaire was created in Asia every two days on average, and the total number of Asian billionaires rose almost a quarter to 637, according to the latest iteration of UBS and PwC's Billionaires Report. Asian billionaires' combined wealth grew almost a third from $1.5 trillion to $2 trillion in 2016.

The growth of Asian billionaires' wealth was “really, really significant,” John Matthews, head of private wealth management and ultra-high net worth at UBS Americas, said during a presentation of the report in UBS' London offices. He described Asia as “the land of implementation and integration”, a notion that suggested businesses may initially be rolled out in one jurisdiction but truly thrive once launched in Asia.

The 1,542 billionaires analysed in the report employed at least 27.7 million people worldwide – roughly equivalent to the UK's working population. New entrants to the list – 25 in the US, three in Europe and 117 in Asia – employed at least 2.8 million people. Global billionaire wealth jumped 17 per cent to reach $6 trillion, double the growth rate of the MSCI World Index.

Asia may have leap-frogged the US in terms of its billionaire headcount, but US resident billionaires grew their collective wealth from $2.4 trillion to $2.8 trillion, just shy of 40 per cent higher than in Asia.

However, if the current trend continues, the total wealth of Asian billionaires will surpass that of their US peers in three to four years' time, the report forecasts.

Around three-quarters (70-75 per cent) of the world's billionaires were entrepreneurs, meaning they were not born into wealth but instead created it themselves through successful business ventures and risk-taking.

Matthews echoed this finding, and said the entrepreneurial spirit “is alive and well in the US” - a nation he described as “the land of innovation” that has benefited from its strong finance and technology sectors.

Meanwhile, Europe saw the weakest weakest growth in wealth, described by UBS as “static”. The region's overall wealth swelled only 5 per cent to just over $1.3 trillion, and 24 new billionaires made the cut. However, 21 billionaires dropped from the list - a third of them due to death, UBS said - and this corresponded with “previous findings that Europe has the highest number of multi-generational billionaires” .

Peer-to-peer networks were increasingly used by ultra-rich clients who sought advice on philanthropic ventures. As a result, they sometimes circumvented the need for wealth managers' advice in this area, and instead preferred to heed recommendations from “like-minded” people, UBS said.

Billionaires “flock to networks the same interests and common themes,” Dr Marcel Widrig, partner and private wealth leader at PwC, explained alongside Matthews at the report's launch event.

Public vs private

The report highlighted that the majority of Asian billionaires were likely to take their companies public. In Europe and the US, however, the narrative was opposite.

Out of the Asian billionaires referenced in the report, nearly two-thirds (63 per cent) owned publicly-listed companies. In the US and Europe, 63 per cent and 60 per cent of billionaires owned private companies, respectively.