Amid a slowdown in global growth, persistent trade tensions and a late-year slump in equity markets, billionaire wealth declined by 7% to $8.6 trillion in 2018, says a new report.
The billionaire population also declined by 5.4% to 2,604, only the second time it suffered an annual fall since the financial crash a decade ago, says the Wealth-X Billionaire Census 2019.
The Middle East experienced a 7.9% fall in billionaire numbers, which translated to a 6.5% drop in its collective wealth, marginally better than the global average. Saudi Arabia remained the region’s largest billionaire country with 57 billionaires.
Support from gradually rising oil prices reversed sharply in late 2018, when commodity markets slumped
amid the broader global slowdown in the region. Equities fared better than in most other regions, but geopolitical risks, the weaker trend across emerging markets and some investor caution constrained opportunities for wealth creation, it said.
The Wealth-X Billionaire Census 2019, analyses the status of the world’s billionaires, who, despite being modest in number — and falling in 2018 — hold immense wealth and wield a significant influence over the global economy.
The top 10 billionaire countries/ territories were: US (number -705; total wealth – $3,013 billion); China (285 – $996bn); Germany (146 – $442bn); Russia (102 – $355bn); UK (97 – $209bn); Switzerland (91 – $240bn); Hong Kong (87 – $259bn); India (82 – $284bn); Saudi Arabia (57 – $147bn); France (55 – $195bn); and UAE (55 -$165bn).
Which region saw an increase in billionaires?
Following dynamic growth a year earlier, the decline in the global billionaire population in 2018 was led by Asia-Pacific, which registered a fall of 13%. The number of billionaires in the Europe, Middle East and Africa (EMEA) region dropped by 5%, but there was a modest expansion of the billionaire class in the Americas (+1%), driven by a 3% increase in North America.
A weak equity market performance on the back of slowing growth, tariff disputes and emerging-market volatility resulted in a 9% drop in billionaire net worth in Asia-Pacific, outpacing falls of 7% in EMEA and 6% in the Americas.
There were double-digit rates of decline in Africa’s billionaire population and combined net worth in 2018, driven mainly by oil-price volatility and currency weakness.
Among the top 15 countries by billionaire population, all saw a fall in the number of such individuals apart from the US and three European countries — the UK, Russia and France. All the major Asia-Pacific billionaire countries — China, Hong Kong, India and Singapore — declined in population and total wealth.
New York still dominates
The top 15 billionaire cities accounted for almost 30% of the global billionaire population in 2018, with a total of 773 billionaires. Despite a year-on-year fall in number, the share of the top 15 cities increased by more than 1%. New York continues to be the dominant billionaire city, while Los Angeles and São Paulo were the only cities to experience a rise in their rankings within the top 15. In terms of billionaire density, San Francisco is the clear leader.
While no single industry dominating, banking/finance and industrial conglomerates accounted for a third of the global billionaire population’s primary industry focus in 2018. In eighth position, with 125 individuals, the not-for-profit sector has, over time, become a major area of focus for billionaires. Many individuals, once they have consolidated their fortunes, make the full-time transition toward building a philanthropic legacy.
What’s their leading passion?
More than half of all billionaires are known to be actively involved in philanthropic endeavours. Within this context, there is also an increasing expectation from society for billionaires to give back. Other interests include sports, politics and art — all of which see high-profile involvement by numerous billionaires across the world.
It explores the drivers behind this fall in the global billionaire population, the role of financial markets and the impact of key political and economic developments on billionaire net worth.
In 2018, billionaires accounted for just 1% of the global Ultra High Net Worth (UHNW: those with $30m+ in net worth) population, but held almost 28% of its combined wealth. As with wealth across the public at large, the distribution of net worth among billionaires is highly skewed.
Some 86 of every 100 billionaires reside in the two ‘lowest’ wealth brackets — of $1bn–$2bn and $2bn–$5bn — but they account for only just over half of all billionaires’ combined wealth. At the upper end, there were a select group of 25 individuals each with a net worth of over $25bn in 2018. Together, they controlled a 15% share of total billionaire wealth, amounting to $1.3trn, equivalent to the market value of the entire economies of Spain or Australia, for example.