The Knight Frank Wealth Report 2015 throws up many interesting findings
The
highest number of ultra-high net worth individuals (UHNWIs), those with net
worth of over US$30 million in India are residents of Mumbai. The Knight Frank
Wealth Report 2015 reveals that 619 UHNWIs were residents of Mumbai, followed
by Delhi (157), Bengaluru (75), Chennai (49), Hyderabad (39) and Ahmedabad
(20). London topped the chart, having the highest number of UHNWIs residents at
4,364, followed by Tokyo (3,575), New York (3,008), Singapore (3,227) and Hong
Kong (2,690).
Mumbai ranked 26th among the 40 most
important cities for UHNWIs, the first being London, followed by New York, Hong
Kong and Singapore. The
report predicts that the most rapid growth in wealth will be seen in the likes
of Ho Chi Minh City, Jakarta, Mumbai and Delhi. Moreover, one-fifth of the
cities are expected to see greater than 100% growth over the next decade, all
of which are in Asia or Africa.
Also,
the report says that 10% of all additional growth in UHNWIs will take place in
just five cities – Singapore, Hong Kong, New York, London and Mumbai – over the
next decade.
Wealth held by UHNWIs
The total wealth held by about 172,850 UHNWIs worldwide stood at $20.8 trillion. The global population of ultra-high-net worth individuals grew by almost 5,200 last year. The report shows that 65,335 people have joined the ranks of the ultra-wealthy over the past decade – a rise of 61%. In total, there are now 1.72 lakh individuals in this category who hold wealth totaling $20.8tn, an increase of $700 billion during 2014.
|
Global pyramid of wealth 2014 |
|
|
Billionaires |
1,844 |
|
Centa-millionaires |
38,280 |
|
UHNWIs |
172,850 |
|
Millionaires |
17,808,831 |
|
Total population |
7,290,912,784 |
|
Source : source: wealthinsight, worldometers.info |
|
*those with US$100m in net assets
Growth of UHNWIs
The
Knight Frank report shows that Asia overtook North America as the region with
the second largest UHNWI growth. Some 1,419 people moved past the $30 million+
mark in Asia in 2014, after an increase of fewer than 1,000 in 2013. The ultra-wealthy in Asia now also hold more
in total wealth, with net assets of $5.9 trillion, than those in North America,
with $5.5 trillion. However, with a $6.4 trillion treasure chest, European
UHNWIs still control the most wealth.
At the
top of the wealth tree, 53 individuals became billionaires last year, pushing
global membership of this exclusive club to 1,844 – an 82% rise from the number
recorded in 2004.
Luxury
Knight
Frank Luxury Investment Index, which tracks a theoretical portfolio of 10
investable luxury assets, shows that many of investments of passion have seen
their value continue to rise. Pearls, which until recently were considered
rather old-fashioned, are also rising rapidly in value. Almost a third of
respondents to The Wealth Report’s Attitudes Survey expect their wealthy
clients to spend more on luxury goods in 2015, compared with just 8% who expect
it to decline. Among the top 10 countries spending the highest in luxury, India
ranked fifth. “We expect international
luxury goods to be particular beneficiaries of this new wealth in India, rather
than more traditional, local brands. For example, research by Kotak Mahindra
bank has shown that among the wealthy, the traditional Indian wedding gift is
fast evolving away from silver plates towards top Western designer brands,”
states the report.
Wealth trend
The
report, which surveyed advisors, showed that their clients were most interested
in investing in residential property. 81% advisors said that their clients were
interested in residential property and offices (59%) were the next most popular
property type of investment.
Control
of their property investments is clearly important to the wealthy – almost 80%
of respondents said UHNWIs prefer to invest directly in property, with only 12%
choosing to use a fund vehicle.
Outside
property, equities are predicted to be the most popular investment class in
2015, with a net balance of 45% of those taking the survey expecting their
clients’ exposure to stocks and shares to increase in 2015. Consequently, cash,
fixed income bonds and gold and other precious metals are likely to see a
declining demand in 2015.
Investments
of passion, however, remain firmly on the radar for the superrich. Globally,
61% of respondents said their UHNWI clients were becoming more interested in
the likes of classic cars, art and wine.
Art is
the luxury asset where interest is rising the most – perhaps unsurprising given
its accessibility – followed by watches, wine and classic cars. Stamps arouse
the least passion around the world, but there is a noticeable difference in
Africa and Asia, where 14% and 8%, respectively, of survey respondents noted
increasing interest. Drilling down, the figure rises to 17% for China.
Despite collectable assets commonly being described as investments of passion, personal pleasure is still the main motivation for their acquisition, according to 62% of those surveyed. In India, however, status (38%) was considered almost as important, and across Asia capital growth (32%) was a key factor.
Click here to read the full report.
