Driving global wealth_may2011

Driving Global Wealth
Mapping ultra high net worth individuals around the globe

in association with:

Table of Contents

Key findings 3

Introduction: Emerging Wealth Takes Over 4

The Lingering Impact of the Global Downturn 5

Emerging Wealth from Emerging Markets 6

Managing Family Involvement 8

Creating a Philanthropic Legacy 11

Finding Success in Public Service 13

Global Citizens Who Stay Put 15

Conclusion: Emerging Wealth, Emerging Markets, Emerging Opportunities 16

Methodology16

Appendix A: Ultra High Net Worth Individuals by Country 17

Appendix B: Research Definitions 29

© Copyright Forbes 2011 2

he last few years have been historic for wealthy individuals—not so much in their importance but in
how they’ve changed some of the attitudes and characteristics of this unique investment sector. The
global credit crisis had an impact on all levels of society, including the very wealthy, that saw gains
they had made disappear in the sudden market volatility. And while signs of recovery appeared during the
past year, the wealthy, as everyone else, have been taking a more guarded approach to risk.

At the same time, entering the second decade of the This study looks at the characteristics of UHNWIs in
21st century, the balance of global wealth has begun to a dozen global markets: Brazil, China, France, Germany,
shift from traditional western economies to the newer Hong Kong, India, Mexico, the Middle East, Russia,
emerging markets. The unprecedented growth of the Singapore, the U.K., and the U.S. Analysis was conducted
Chinese economy, the expansion of India as a repository on ten different criteria, including:
for innovation, and the ongoing progress of markets in • ource of wealth: Is the wealthy individual self-made,
S
Russia, Brazil and other developing nations, has led to or did he or she inherit wealth?
this swing in the nature of the world’s richest individu-
als and families. • Company ownership: Is the individual’s company
In fact, our study suggests that the center of growth for private or publicly held?
UHNWIs has shifted eastward. While the U.S. still has • Family: Does the individual have children or other
the greatest number of UHNWIs, China, Russia and India relatives involved in his or her business?
have overtaken Western Europe in the number of billion-
• Employment: Is the individual still involved in the
aires they produce. This marks a fundamental shift in the
venture, retired, or a full-time investor?
demographics of the world’s ultra-rich, and this could have
an impact on spending and investing in the future. • Net worth: What is the range of the net worth of the
Simply put, it is not just the number of wealthy indi- individuals being analyzed?
viduals in these emerging markets, but how money is • itizenship and residence: Does the individual hold
C
flowing into these areas from around the globe. As they citizenship and residence in the same country or in dif-
look for new investing opportunities, UHNWIs saw that ferent countries?
these emerging markets were less affected by the 2008-09
downturn than were funds and investments in the U.S. and • Political involvement: How involved is the individual
Europe. Today, they are adding these opportunities to their in national or local politics?
wealth management portfolios. • Charitable foundation: Does the individual fund or
To gain a greater understanding of the characteristics run his or her own charitable foundation, or does the
of ultra high net worth individuals (UHNWIs), and how individual otherwise make philanthropy and giving a
this investment segment is developing, Forbes Insights, large part of his or her life?
in association with Societe Generale Private Banking, • ge: How old is the individual?
A
conducted an in-depth analysis of the world’s wealthi-
est individuals. This exclusive data is derived from Forbes • ender: Is the individual male or female?
G
Magazine’s database of the world’s wealthiest people, look-
ing at both people who made the “billionaire’s” list in
2010, as well as other UHNWIs.


Key Findings

Forbes Insights, in association with Societe Generale Private Banking, examined the unique characteristics of ultra high net worth
individuals (UHNWIs) in a dozen countries. The analysis is based on exclusive data from Forbes Magazine’s database of the world’s
wealthiest people. The minimum net worth of the individuals studied was US$1 billion, with three exceptions: India ($500 million
minimum), China ($425 million minimum), and Singapore ($190 million minimum).

Key findings from this analysis include:

• hile recovery seems to have come quickly to many UHNWIs, there are still lingering effects from the 2008-09
W
global downturn. In particular, the impact has been on some of their investing attitudes and actions. Based on interviews
and conversations with UHNWIs, they appear to have reduced their risk exposure, but have significant concerns about the
possible impact of inflation over the coming years. In addition, many are revising their portfolios with greater investment in
emerging markets such as China and the Asia Pacific region, where they believe there is less potential volatility. Finally, for
some UHNWIs, the post-downturn timeframe has been an opportunity to review their advisor relationships.

• he greatest area of UHNWI growth has been in the world’s emerging economies, particularly the so-called BRIC
T
nations of Brazil, Russia, China, and India. Today, both China and Russia have more than 100 billionaires in their ranks,
putting them second and third behind the U.S. But UHNWIs in these emerging markets are different from those elsewhere in
the world. They are younger; the average age of the UHNWI in Russia is just 49 and in China it is 50. They are predominantly
self-made, having been responsible for creating their own wealth. They remain involved in their businesses. But they are still
determining what they will do with their wealth, trailing other markets in areas such as philanthropy, for example.

• here are extremely strong family links among the UHNWIs studied. This is a global phenomenon present in nearly all
T
markets, with a few notable exceptions such as Russia. In many societies, keeping family close is a priority, as they have their
children and other family members involved in their businesses. Still, as generations pass, some conflicts can arise, particularly
when investments are managed by a family office.

• hilanthropy and charity remain priorities for many UHNWIs as they look for ways to create a more lasting
P
legacy and have a greater impact on society. In three quarters of the markets studied, more than 40% of the UHNWIs
fund their own charitable foundation, or run a charitable foundation founded or started by other family members. Yet this is
not yet universal. China remains a significant outlier, as only 7% of UHNWIs have foundations. But efforts are underway to
encourage greater giving and philanthropy from the emerging Chinese billionaires.

• aving made their marks in the business world, some UHNWIs see their next steps as shaping policy and debate
H
in the public sector. Tracking the political activity of the world’s richest people is difficult. In some nations such as the U.S.
or India, many UHNWIs individuals are open in their support of certain political causes, and some billionaires have turned
from business to politics. But elsewhere in the world (such as in Europe), UHNW individuals have been less open in their
political involvement, either not being involved or keeping their positions unknown.

• espite being global citizens, many UHNWI maintain citizenship and residence in the same country. The figure is
D
over 90% for most markets studied. The biggest outlier is Hong Kong—still maintaining its image as a haven for global
wealth—where 28% of the UHNW individuals studied hold citizenship and residence in different countries.


The Lingering Impact of the Global Downturn
Nobody was untouched by the global recession of 2008- “Our advisors have been warning us about the risk of
09, and the effect of the downturn lingered into 2010 for inflation,” said a second-generation Europe-based manu-
some UHNWIs. Still, the overall impact wasn’t just related facturer. “It makes sense to prepare for it.” While he would
to the value of portfolios. Certainly those were affected, not disclose his specific investing plan, he did allude to
but, for many UNHWIs, the biggest shift may have been moving away from the dollar.
related to their investing attitudes and actions.
Based on conversations and interviews with UHNWIs Looking at developing nations
across the globe, as well as with some of their advisors, As they assess their investment portfolios, some of the
many of the world’s wealthiest were stung by the down- UHNWIs interviewed are examining putting a greater
turn, but not to the same extent as other investors. (Most share of their capital into emerging markets, particularly in
of these interviews were conducted on the condition that the Asia Pacific area. While investments in emerging mar-
they would be used for background and that information kets also fell during the economic downturn, they were not
not be attributable to the individual.) In the words of as volatile as those in developed markets, and they recov-
a U.S.-based technology investor: “The thing to con- ered more quickly, said one interviewee.
sider is that in this downturn, it wasn’t just a few assets, Noted a U.K.-based investment advisor for UHNWIs,
it was nearly all asset classes. So everyone got burned “The emerging markets as a whole are growing at a 7 per-
nearly equally.” cent clip. The developed countries have enormous debt
Still, the recession has influenced how some of these whereas the emerging nations have healthy balance sheets.”
UHNWIs are investing today, and how they interact with The advisor added that he has recommended building
their advisors, as the anecdotes below describe: portfolios that “decouple the emerging world with the
developed world. I believe that’s going to play a role in
A speedy recovery nearly all strategic wealth management.”
Many of the UHNWIs interviewed indicated they felt their
investments had recovered more quickly after the down- Turnover in investor relationships
turn than perhaps the “general public” had. In some cases, It’s hard to say whether it is attributable to the post-down-
they felt their advisors had helped them move away from turn hangover or simply a matter of it being an opportunity
the more volatile real estate and public markets prior to the to shake things up, but a number of UHNWIs indicated
depth of the downturn, and encouraged them to return they were assessing new advisor relationships, or looking to
to some of those investments at the right time. “I’ve done restructure their existing investment advisor roster.
well,” said one U.S.-based investor in charge of his family’s For one UHNWI who made his money in the U.S.
office. “I feel we saw what was coming and moved away at retail industry, its nothing more than a matter of regular
the right time.” due diligence. “I’m not looking to have different broker-
age advisors compete against each other, but I want to
Lowering risk, but fearing inflation be sure that the people I work with are the best at exe-
UNHWIs, almost as a rule, are often more moderate risk tak- cuting my investment strategy.” As he has rebalanced his
ers, focused more on wealth preservation and strategic growth assets to achieve his goals, he’s also replaced a couple of
rather than high-return/high-risk investment. Following the his advisors because their areas of expertise no longer fit
recession, some of those interviewed who had dabbled with the portfolio’s approach.
higher-risk investments such as hedge funds were retreating Or as another UHNWI indicated, “There’s been some
from those in favor of more mainstream equities. churn in relationships because sometimes, it’s just time for
The biggest concern many of the UHNWIs is inflation. a change.”


Emerging Wealth from Emerging Markets
Few economic developments have compared to the mete- Emerging market UHNWIs are generally younger
oric growth of China both as a global industrial powerhouse, The average age of the UHNW individual in Russia is 49
and as a creator of unprecedented wealth for those entre- and is 50 in China. (Fig. 1) Compare that to more estab-
preneurs, industrialists, and investors who have succeeded lished economies such as the U.S., where the average age
over the past decade. While other economies contracted of a UHNWI is 66, or France, where it is 74. In other
during the global credit crisis, China remained strong and words, emerging market UHNWIs are often just estab-
vibrant, and today it leads the so-called BRIC nations— lishing themselves, so their overall influence and activity
Brazil, Russia, India and China—as the greatest areas of will likely continue for an additional decade or two. Their
growth for UHNWIs. wealthy status has just begun, and the long-term impact is
Consider some recent numbers: In the 2011 Forbes bil- likely to be sizable.
lionaire’s list, the BRIC nations produced more than half
of the new billionaires to join the ranking. Until the past Emerging market UHNWIs are self-made
12 months, no nation other than the U.S. was home to Entrepreneurship is alive and well in the BRIC nations,
more than 100 billionaires—today China has 115 and and is paying off handsomely for those that have succeeded.
Russia 101. 100% of the UHNWIs studied in Russia are self-made—
The analysis shows that UHNWIs in these emerging meaning every single one was responsible for creating their
markets—while they have much in common with their own wealth and did not inherit it.
counterparts elsewhere in the world—also have a number
of unique characteristics.

Figure 1: Average age of UHNWIs, by country

74

68 68
The ultra-rich in emerging markets are 66 66 65 64
making their fortunes at a younger age than 62 61 60
UHNWIs in the West. China’s and Russia’s
wealthy are, on average, 15 years younger
50 49
than their counterparts in the U.S., U.K.
or Germany.

France Brazil Hong Germany U.S. U.K. Mexico Singapore Middle India China Russia
Kong East


While Russia may be an extreme in that area—espe-
cially given its political history over the past 90 years—other For UHNWIs in emerging
wealthy individuals in the BRIC nations have been sim-
ilarly entrepreneurial. In China, two thirds (66%) of the markets, determining how
UHNWIs studied were self-made. For India, that figure is
65%, and for Brazil it is 67%. The impact of this entrepre- to give money away
neurialism is further evident in the ongoing involvement of
these individuals in their businesses (see below), and what is may be more difficult
likely to be a continued expansion of their wealth based on
their desire for ongoing success. than earning it.
BRIC UHNWIs are involved in their business
Whereas UHNWIs and entrepreneurs in some western money away has been more difficult than earning it. As this
markets appear eager to sell their companies once they new generation of titans emerges, it is unclear whether they
are successful, most of those in the BRIC nations remain will be as committed to giving back their wealth as some
actively involved with their businesses. This may be of their western counterparts have been. For instance, just
because they are younger and not yet ready to take a more 7% of Chinese UHNWIs analyzed in the study have their
passive role. Or it may be attributable to the high growth own charitable foundations, a far cry from the 55% that do
trajectories for many of these companies, and the desire of so in the U.S.
the leaders to see that growth through. It may be premature to say that these individuals will
Among the UHNWIs studied, 93% of Russian UHNW not be philanthropic, however, as many may see themselves
individuals, and 85% of Chinese UHNWIs are employed as being at the stage of “building” their wealth. There are
full time, meaning they are in control of, directing, or run- also social and political issues that are unique to these mar-
ning their companies. The figures for India and Brazil are kets that are affecting giving strategies—for example, is
78% and 75%, respectively. philanthropy seen as a way to help a nation’s people, or is
that a role for the government?
Emerging market UHNWIs are still determining Ultimately, how a select number of UHNWIs in
how to give back emerging markets approach philanthropy may end up guid-
Philanthropy is a mixed bag among UHNWIs in emerging others. These nations have yet to have their Carnegies
ing markets. For many, determining how or when to give or Rockefellers to usher in their ages of philanthropy.

Still a Man’s World
Gender diversity has not yet come to the world of ultra-high net worth.

In most of the markets studied, UHNW individuals are predominantly male. Of the markets studied, the ones with
the highest percentage of female UHNW individuals were Hong Kong (23%) and Germany (17%).

In most other markets, more than 90% of UHNW were male.


Managing Family Involvement
There are extremely strong family links among the Figure 2: Family in Business
UHNWIs studied. This is a global phenomenon, and it is
Brazil
present in nearly all markets, with a few notable exceptions
13
such as Russia. 25
Clearly, in certain societies, keeping family close is
China
a priority, and UHNWIs in these countries are more
12
likely to have children or other family members work- 27
ing in the business. (Fig. 2) More than half of UHNWIs
France
from the Middle East have their children involved in
50
their businesses, and a similar percent have other fam- 25
ily members involved (note that a person can have both
Germany
children and other family members employed). Similarly,
19
in India, 58% of UHNWIs have their children working 34
with them.
Hong Kong
Within many of these developing nations, one person’s
55
wealth is often seen as something to be shared—a legacy 30
that can enrich both the immediate and the extended fam-
India
ily. “In our culture, family still comes first. Wealth becomes
58
a way to bring everyone closer together,” said a wealthy 37
finance executive from Latin America. “It is important to
Mexico
share our advantages with those closest to us.”
11
But involving family in wealth strategies certainly 56
comes with its challenges. Once a family has significant
Middle East
wealth, the problem becomes how to preserve it for future
53
generations. This is often a surprisingly difficult task, 53
as it may require the family to tackle personal issues as
Russia
much as they need to deal with investment and financial
8
uncertainties. 17

Singapore
25
45

U.K.
11
UHNWIs in India, Hong Kong, the Middle East, and
14
France are most likely to have children involved in their
business, while those in Mexico, the Middle East, and U.S.
Singapore involve other family. 21
28

0% 50% 100%

• Children in Business • Other Family in Business


To manage such conflicts, many UHNWIs turn to a
single-family office (SFO), a professional organization ded- “In our culture, family still
icated specifically to managing their personal fortunes.
While SFO involvement was not directly analyzed in the comes first… It is important
Forbes wealth list data, other studies have looked at the
issues and characteristics of the SFO. According to a 2009 to share our advantages
study from the Wharton Global Family Alliance, SFOs
and the families behind them are generally entrepreneur- with those closest to us.”
ial, insofar as the families involved are often still majority
shareholders involved (similar in profile to the UHNWIs
from the Forbes list). These families tend to view their
SFOs as private investment services, more focused on main-
taining and growing wealth than on “softer” services—a
hedge fund expert shouldn’t be distracted by having to deal
with domestic staff issues.

Issues in the Family Office
For a second-generation European business owner, managing multigenerational wealth through a single-family office is at
times both a godsend and a curse. It both eases some of the issues related to investing and growth of the family fortune,
but it also sets up a number of conflicts as different segments of the family have different opinions regarding allocation and
risk profiles.

“Our goal for the past several decades and going forward has been to manage our wealth independently so that the principals
have enough time to devote to the business,” said the executive. “Staffing our office with professionals that don’t have a direct
link to the family has been beneficial.” He added that the group has a staff of 9, including tax advisors and legal counsel.

Still, he has found that as a third generation has become more involved in the SFO’s business and now sits on its committees,
it is becoming increasingly necessary to outsource some of its functions. For example, the group recently decided to restaff
its investing team to focus its expertise primarily on private equity placements (they used a unique performance bonus structure
to lure a high-performer into the organization). Other portfolio matters are being contracted with several independent
investment professionals.

“We try to have a long-term investing vision and adhere to investing best practices,” he added. This helped the family ride
out the 2009 downturn, and will help them find value in their future investments.


Globally, many expect the biggest growth in family Figure 3: Source of Wealth
offices to occur in Asia, as UHNWIs in that region who
have gained their wealth over the past two decades look Brazil
66 6 28
to come up with ways to pass it on to the next generation.
“We’ve been pretty unsophisticated investors compared to China 1

Americans and Europeans,” said a Singapore-based inves- 65 20 14

tor specializing in biotech. “Wealthy Asians need to look France
for ways to grow their assets and preserve them for future 33 17 50
generations.”
Germany
The importance of using
Entrepreneurial activity still drives 36 32 32
services such as an SFO most wealth creation in both
or private bank is further Hong Kong
emerging and established markets
48 5 19 28
demonstrated by under- as most UHNWIs fall into the
standing the source of the category of “self-made” wealth. India
UHNWI’s wealth. 65 17 18

Entrepreneurial activity still drives the vast majority Mexico
of wealth creation in most markets—the defining charac- 56 33 11
teristic of the “self-made” individual. In half the markets
Middle East
studied—Brazil, China, India, Russia, the U.K., and the
42 16 42
U.S.—more than 60% of the UHNWIs were “self-made,”
meaning that they “earned” their wealth through the suc- Russia
100
cess and growth of their business ventures.
But even in those markets where the majority of Singapore
UHNWIs received their wealth through inheritance, 13 3 10 74

many are actively involved in growing that financial leg- U.K.
acy. (Fig. 3) For example, in France, two thirds of the 80 10 10
UHNWIs inherited their wealth, but half are actively
U.S. 1
involved today in growing the fortunes. Similarly, in the
68 18 13
Middle East, 42% of UHNWIs inherited their fortunes,
but are still looking to grow them. • Self Made • Inherited • Inherited and Growing • Other


Creating a Philanthropic Legacy
In 2010, many UHNWIs were issued a challenge: increase Figure 4: Charitable Foundation
their charitable giving and develop a way to return their
wealth to charitable causes. Brazil
38
The “Giving Pledge”—kicked off by Warren Buffet and
44
Bill and Melinda Gates—is an effort to have the wealthi-
est individuals and families in America commit to giving China
7
the majority of their wealth to the philanthropic causes and
35
charitable organizations of their choice either during their
lifetime or after their death. The goal: have those who have France
58
been most fortunate make a moral commitment to give,
33
and through their generosity make the world a better place.
More than 50 of the wealthiest U.S. individuals and Germany
45
families have taken the pledge. And the challenge has been
64
extended overseas, as Buffet and Gates traveled to China to
share their experiences with philanthropy with the wealthy Hong Kong
43
entrepreneurs from that emerging nation.
30
Philanthropy and charity have long been part and par-
cel with ultra high net worth, as individuals look for ways India
48
to create a more lasting legacy and have a greater impact
24
on society.
The analysis of the Forbes data suggests that this is still Mexico
44
true. In three quarters of the markets studied, more than
56
40% of the UHNWIs fund their own charitable founda-
tion, or run a charitable foundation founded or started by Middle East
63
other family members. (Fig. 4) And in seven of the markets,
58
more than 40% of the UHNWIs gave other substantial
charitable contributions; that is, made donations outside of Russia
26
their foundations, or made sizable donations without hav-
52
ing their own or a family foundation.
While many think of philanthropy as an American Singapore
43
notion—people in the U.S. give more to charity than
13

U.K.
57
In most markets studied, foundations and charitable 49
giving is part of the legacy UHNWIs are trying to
create, but the ultra-rich in emerging markets have U.S.
some catching up to do. 55
50

0% 50% 100%

• Charitable Foundation • Other substantial charitable giving


people in any other country—clearly giving has become a foundation, and 35% make some sort of other sub-
global in nature. In the U.S., 55% of UHNW individu- stantial charitable giving. There remains great cultural
als studied operate charitable foundations, and of those that hesitancy in that country to making a charitable pledge.
do not, nearly three quarters recorded substantial charitable For instance, Confucian values call for people to take care
donations. Yet even more UHNWIs operate foundations in of their families first, which is often considered a reason
the U.K. (57%) and France (58%). And in the Middle East, why Chinese UHNWIs leave wealth for their descen-
where Sharia law often directs charitable contributions, dents. In fact, when Buffet and Gates visited, they had
63% of UHNWIs fund a charitable foundation. to issue an official letter to the state news agency to clar-
Even in the emerging market of India, 48% of UHNWIs ify that attendees at their event would not be asked to
have a charitable foundation. Consider, for example, Wipro donate anything.
founder Azim Premji, who has pledged much of the fortune But that could be changing. After the visit by Buffet and
he made through his information technology company to Gates, several Chinese entrepreneurs changed direction.
his foundation, which currently is focused on improving Chen Guangbio, a recycling entrepreneur with a fortune
public education in India. estimated at more than $400 million, announced on his
As noted earlier, China remains an outlier in the area company’s website that he planned to give all his money
of philanthropy, as just 7% of Chinese UHNWIs have away. Others could follow his lead.

Philanthropy Keeps a Legacy Alive
One could argue that the most valuable and enduring assets of a multigenerational family are its shared values, its reputation,
and its place in society. Evidence of its good work can serve as a magnet to draw individual family members together and
provide direction for the future.

Nowhere is this truer than in the family charitable foundation of the descendents of an American industrialist who made his
fortune more than 60 years ago. Based in a midsize city, the foundation—actually an amalgam of several foundations run by
different branches of the family—has two key points of focus: maintain and grow its endowment, and support the kinds of
causes the family’s patriarch would have supported during his lifetime, according to a family board member.

Maintaining and growing the endowment, the board member said, comes via the family’s commitment to supporting their
foundations. The commercial side of the family fortune has shifted from manufacturing to investing, including commercial real
estate and private equity investment. While those investments are not part of the foundation’s endowment, their ongoing
success provides the funds, the board member added. In terms of causes, the foundation’s charter calls for it to support areas
of social equality, cultural enrichment, and local causes, including medical research and education.

“It is important for us to maintain what our family stands for,” the board member said. “Our wealth came via inheritance,
but our true legacy is really about what we continue to do with it.”


Finding Success in Public Service
Philanthropy is one way UHNWIs can give back to
society. Another way is through activity in the pub- Many UHNWIs see political
lic sector.
A growing number of entrepreneurial UHNWIs, involvement as a way to
having made their fortunes in business, have turned
to politics to take their success in the private sector shape public debate and use
and bring it to public service. Consider the number of
high-profile billionaires that have turned from business their business experience
to politics. New York City mayor Michael Bloomberg
made his fortune via his namesake information services for public service.
and media company. Lebanese prime minister designate
Najib Mikati co-founded the telecommunications com-
pany Investcom.
In most cases, these are not individuals who are look-
ing to further enrich themselves via the public sector, or
see political involvement as a way to improve the standing
of their businesses. Rather, many see it as a way to shape
the debate on critical issues, and use their business experi-
ence for public service.
Still, tracking the political activity of the world’s
richest people is difficult. The Forbes Insights research
defines “political involvement” as those individuals who
have donated money to a political party in a manner that
is recorded in public record; have been known to attend
political fundraisers; have served on or in a government
cabinet, task force, or partnership on the local, federal or
international level; have attended global economic confer-
ences sponsored by governing bodies; or have run for or
served in elected office.


While this definition can identify some of the politi- Figure 5: Political Involvement
cal involvement of UHNWIs, information to back up all
Brazil
involvement is not always available. (Fig. 5) As a result, the
13 87
figures for those who are
“not” politically involved While political involvement of
China
include both UHNWIs UHNWIs is not easy to track, 6 94

who noted that they remain wealthy individuals in the U.S., France
politically neutral as well India, and the Middle East are 17 83
among the most active.
as those for whom no data Germany
2
is available. Thus, it is pos- 98
sible that some are politically active on some level, but data
Hong Kong
cannot be found either due to country disclosure laws or
35 65
dearth of public information.
In nations studied, political activity among UHNWIs India
is most common in the Middle East (74%), the U.S. (52%), 48 52

and India (48%). Mexico
In the Middle East, the high rate of political involve- 33 67
ment may be due to the concentration of wealth of the Middle East
ruling families, and the political appointment of mem- 74 26
bers of these families in the countries studied (the United
Russia
Arab Emirates, Saudi Arabia, Kuwait, and Lebanon).
20 80
For example, prime minister of Kuwait, Sheikh Nasser
Al-Sabah, is the nephew of the emir Sheikh Sabah Singapore
Al-Ahmad Al-Jeber Al-Sabah. It is this kind of concen- 15 85

tration of wealth and political power that led to some of U.K.
the protests and democracy demonstrations in countries 9 91
such as Bahrain in 2011. U.S.
In the U.S. and India, political involvement and polit- 52 48
ical donations may come from the increasing expense of
running a political campaign. In the U.S., political fun- • Yes • No/Unknown
draising has been well documented, and the courting of
wealthy individuals is part of the ongoing process. In India,
electioneering has also become dominated by candidates’
desires to outspend their rivals as they run for office.
This trend also accounts for the lower levels of political
involvement in certain European countries, where elec-
tions may be publically financed, and privacy laws limit
political disclosures.


Global Citizens Who Stay Put
UHNWIs are the stereotypical global citizens. Given their Figure 6: Citizenship of UHNWIs
wealth and the global nature of their investments and inter-
Brazil
ests, many are likely to maintain multiple residences and
89 11
conduct business and across the world.
For example, one UHNWI interviewed for this study China
is a U.S. citizen. His office 94 6

is based in the U.K., and he The vast majority of UHNWIs France
maintains residences in both have residence in their country of 91 9
London and New York, citizenship, but Hong Kong and the
Germany
where his family resides. His U.K. still attract the ultra-rich from
81 19
elsewhere in the world.
primary area of investment
Hong Kong
specialty, however, is real
72 28
estate in developing markets, particularly in India and now
Hong Kong, and he operates out of offices in those nations India
as well. 94 6

Still, the vast majority UHNWIs individuals maintain cit- Mexico
izenship residence in the same country. (Fig. 6) In two thirds 100
of the markets studied, more than 90% of UHNWIs hold citi-
Middle East
zenship and residence in the same country. For Mexico and 100
the Middle East, all of the UHNWIs studied live and reside in
Russia
those regions. In the U.S., the figure is 97%.
93 7
The biggest outlier is Hong Kong—still maintaining
its image as a haven for global wealth—where 28% of the Singapore
UHNW individuals studied hold citizenship and residence 93 7

in different countries. In the U.K., where UHNWIs from U.K.
elsewhere in the Commonwealth often maintain residence, 83 17
17% of the individuals studied hold citizenship and resi-
U.S.
dence in different countries. 97 3

• Holding Citizenship and Residence in Same Country
• Holding Citizenship and Residence in Different Countries


conclusion

Emerging Wealth, Emerging Markets,
Emerging Opportunities
There has been a significant shift in how wealth is distrib- the most successful entrepreneurs. And emerging market
uted around the globe, as so-called emerging markets have money will also be fueling the growth of wealth in western
come forward as the fastest growing markets for the ultra- markets—consider how Russian entrepreneur and venture
rich, perhaps at the expense of more established wealth in capitalist Yuri Milner has invested in successful U.S. Internet
western Europe. Driven by strong entrepreneurism and properties such as Facebook, Zynga, and Groupon, whose
meteoric growth in countries such as China, India, and owners themselves are billionaires.
Russia, these newly minted UHNWIs are creating a new Still, challenges exist. The concentration of wealth in
demographic wealth profile. countries such as India and China—where significant pov-
Consider, for example, the profile of the average erty also exists—may need to be watched closely. In India,
UHNWI in China. This person is young ( just hitting 50), for instance, concerns have been voiced that major family-
self-made, entrepreneurial, and continues to be focused on based corporations wield disproportionate influence over
building wealth. At the same time, the Chinese UHNWI markets. Local governments in China are looking for ways
may not yet be comfortable with wealth, and is still figur- to expand the standard of living for its emerging middle
ing out how to affect society through philanthropy. class. The concern: to avoid chances of social unrest.
The impact of this geographic shift in wealth could be Ultimately, the influence of this shift will be felt for
long-lasting. Not only do these markets make billionaires, years to come. Older, established wealth could be usurped
but they are also are attracting the investments of other by the emerging market billionaires. Philanthropic giv-
UHNWIs seeking stable growth opportunities. This strong ing by these emerging market UHNWIs could change the
funding could further spur economic growth in the emerg- specter of poverty into opportunity in these markets and
ing markets, creating even more innovation and wealth for create a lasting legacy.

Methodology
The information in this study is based on an exclusive analysis of ultra-high-net-worth individuals in 12 markets conducted by Forbes Insights. The markets studied
were: Brazil, China, France, Germany, Hong Kong, India, Mexico, the Middle East (United Arab Emirates, Saudi Arabia, Kuwait, Lebanon), Russia, Singapore, the
U.K., and the U.S.
Using the Forbes Magazine list of the world’s wealthiest individuals from 2010, Forbes Insights evaluated trends and developments of UHNW individuals against
a number of key criteria, including company ownership, citizenship and residence, source of wealth, employment status, family business involvement, charitable
foundations and giving, and political involvement.
The minimum net worth of the individuals studied was US$1 billion or local currency equivalent in all markets. There were three exceptions: India ($500 million
minimum), China ($425 million minimum), and Singapore ($190 million minimum).
In addition, 17 interviews were conducted with UHNWIs in the countries studied. Each person interviewed had at least US$60 million in net investable assets. Many
of the interviews were conducted “off the record,” but the insights they provided were used to help shape the analysis of the data. Others were conducted “not for
attribution,” in order to protect the privacy of the individual interviewed.

Christiaan Rizy Stuart Feil Brenna Sniderman Clara Knutson
Director Editorial Director research Director Researcher


Appendix A

Ultra High Net Worth Individuals by Country

Brazil
(n=18)

Company Ownership Employment Status
Private holding 22% Full-time 75%
Public holding 78% Retired 6%
Full-time investor 6%
Citizenship Residence Other 13%
Citizenship and residence
in same country 89% Charitable Foundation
Citizenship and residence Yes 38%
in different countries 11%
No/None found 63%
Other substantial charitable
Gender giving (total) 44%
Male 94%
Female 6%
Family in Business
Children in business 11%
Average Age Other family in business 14%
Age 68

Source of Wealth Political Involvement
Self made 66% Yes 13%
Inherited 6% No/Unknown 87%
Inherited and growing 28%
Other 0%

Net Worth Range
Min net worth ($mil) $1,100
Max net worth ($mil) $27,000


China
(n=400)

No/None found 94%
Male 96%
Female 5%
Family in Business
Age 50

Other 14%

Net Worth Range
Min net worth ($mil) $425


France
(n=12)

No/None found 42%
Male 92%
Female 8%
Family in Business
Age 74

Other 0%

Net Worth Range


Germany
(n=53)

No/None found 36%
Male 83%
Female 17%
Family in Business
Age 66

Other 0%

Net Worth Range


Hong Kong
(n=40)

No/None found 58%
Male 78%
Female 23%
Family in Business
Age 68

Other 28%

Net Worth Range


India
(n=100)

No/None found 52%
Gender* giving (total) 24%
Male 75%
Female 5%
Family in Business
Age 60

Other 0%

Net Worth Range

*Gender could not be identified for remaining 25%


Mexico
(n=19)

No/None found 44%
Male 100%
Female 0%
Family in Business
Age 64

Other 0%

Net Worth Range


Middle east
(n=19)

No/None found 37%
Male 100%
Female 0%
Family in Business
Age 61

Other 0%

Net Worth Range


Russia
(n=62)

No/None found 74%
Male 98%
Female 2%
Family in Business
Age 49

Other 0%

Net Worth Range


Singapore
(n=40)

No/None found 58%
Gender* giving (total) 13%
Male 30%
Female 3%
Family in Business
Age 62

Other 74%

Net Worth Range

*Gender could not be identified for remaining 67%


United Kingdom
(n=29)

No/None found 43%
Male 90%
Female 7%
Family in Business
Age 65

Other 0%

Net Worth Range


United States
(n=400)

No/None found 45%
Male 90%
Female 11%
Family in Business
Age 66

Other 1%

Net Worth Range


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