New millionaires help Asia overtake Europe in private wealth, says report

Simon Goodley

Asia Pacific is now world’s second wealthiest region and will overtake North America this year, according to survey by Boston Consulting Group

New millionaires in China and India have helped propel the combined wealth of Asia Pacific’s richest individuals past their peers in Europe, with the region’s wealthiest predicted to become more affluent than millionaires in North America over the next 12 months. New “millionaire households” were also created more quickly in Asia Pacific than anywhere else, according to the Boston Consulting Group’s (BCG) annual global wealth report, as the world’s 17m households worth more than $1m (£640,000) grew richer once again during 2014.

For the first time in the survey’s 15-year history, the Asia Pacific region – which for the purposes of this report excludes Japan – overtook Europe to become the world’s second wealthiest region, with $47tn in private wealth, up 29% on 2013. North America, where private wealth totals $50.8tn, remains the wealthiest region, but it will be surpassed next year when the wealth of Asia Pacific’s so-called “high net worths” reaches $57tn, the survey predicts.

A booming equity market helped all wealthy individuals in 2014, but Asia had the added benefit of the fortunes being created by a new generation of entrepreneurs, such as Jack Ma of Chinese e-commerce firm Alibaba and Indian property tycoon Jitendra Virwani. The report’s authors said Asia’s lead in growth will be exaggerated in future years, as they expect stock markets to slow.

Daniel Kessler, global leader of BCG’s wealth management division, said: “We have seen a really strong equity market that has had a very strong effect on existing assets. But looking forward, we assume a moderation in the market performance, with the main difference the newly created wealth in Asia. Two-thirds of the growth in Asia-Pacific is coming from entrepreneurs. We expect Asia-Pacific to add $27.8tn [to the wealth of the region’s richest] over the next five years, of which 70% will be China and 15% India.”

The data also showed another profitable year for the world’s ultra-rich as a whole, with the group’s total wealth growing by 12% to $164tn – about 10 times the size of the annual GDP of the United States.

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Within that, BCG’s report estimates that private financial wealth in western Europe grew 6.6% to nearly $40tn in 2014, and by 19% to $3tn in eastern Europe. A quarter of western Europe’s wealth is held by those households with more than $1m in private wealth, compared with 42% globally.

In the UK, the number of households worth more than $1m grew by 7% in 2014 to 730,000 – with 1,019 worth more than $100m – while the country’s private financial wealth rose by 11.5% to $9.7tn on the back of the decent performance by equities and bonds.

The United States has the most households worth more than $100m with 5,201, ahead of China in second place with 1,037 households, the UK in third, and India in fourth with 928. All retain the same rankings on the ultra-high net worth list as in 2013.

The Guardian