- The wealth of the world’s billionaires rose to $US6 trillion in 2016, driven by self-made entrepreneurs, according to a new report by UBS and PwC.
- Growth occurred fastest in Asia, with one new billionaire in the region created every two days.
- Growth was largely driven by four sectors: technology, minerals, industrials, and financial.
The surge in wealth was driven by self-made entrepreneurs and rapid wealth creation in Asia, the report said.
“What we are seeing is the acceleration of entrepreneurs in the billionaire cohort,” said Josef Stadler, head of global ultra high net worth at UBS. While only 45% of billionaires were self-made in 1995, the percentage of entrepreneur billionaires has now risen to 80%.
For the first time, Asian billionaires outnumber those in the US: there are 637 billionaires in Asia compared to 563 in the US. One new billionaire was created in Asia every two days in 2016. Although the average wealth of US billionaires is still greater, their Asian counterparts are expected to overtake them within 3-4 years.
In the US, almost all wealth is now “self-made,” said John Mathews, head of private wealth management and ultra high net worth at UBS Americas.
“The entrepreneur is alive and well,” Matthews said, and the US is still “the land of innovation.”
But tech companies and products that begin their lives in the US are increasingly moving to Asia, which is “the land of implementation and integration into society.”
It is this widespread adoption in Asia that is creating wealth at a much more accelerated pace, he said.
Prominent Asian billionaires include real estate mogul Wang Jianlin, with a net worth of $US29.7 billion and one of China’s richest men, and Indian industrial magnate Mukesh Ambani, who has a net worth of $US41.4 billion.
New additions to the billionaire list in 2016 included Zhou Qunfei, founder of Lens Technology, who is the world’s richest self-made woman and worth an estimated $US10.2 billion. Cheng Wei also joined the list after cofounding Uber’s biggest competitor in China, Didi Chuxing.
Last year’s surge in wealth creation was driven by four sectors: materials, industrials, financial and technology. While growth in the materials industry is largely cyclical, James Purcell, head of hedge funds at UBS, said that the boost in the tech industry is structural and likely to generate future and sustainable growth.
The tech industry creates the youngest billionaires — although most of the wealth creation was still driven by those over the age of 50.
“It takes time to create this type of wealth,” said Marcel Widrig, a partner at PwC. “It’s not an overnight success.”
Stadler said there is a growing cohort of next-generation “serial entrepreneurs.” The report also found:
- The total wealth of billionaires rose from $US5.1 trillion to $US6 trillion, double the rate of the MSCI World Index.
- Billionaires own or partly own companies that employ at least 27.7 million people worldwide, roughly the same as the UK’s working population.
- The new billionaires created in 2016 employ at least 2.8 million people.
UBS said the biggest problem facing the current crop of billionaires is the issue of succession. Many younger generations don’t necessarily want to inherit the family business but to instead invest in other sectors as well as in social projects.