The number of ultrahigh-net-worth people reached an all-time high this year, largely due to growth in North America and Europe, according to the World Ultra Wealth Report 2013, assembled by Wealth-X and
UBS AG.
The moniker applies to both the number of people qualifying as UHNW as well as stratum's total combined wealth. The population is up 6.3% to 199,235 this year, from 187,380 in 2012, while the group's total combined wealth has climbed 7.7% to $27.8 trillion, from $25.8 trillion.
“Market conditions are very healthy for UHNW clients,” said Craig Brothers, managing director of fixed income at Bel Air Investment Advisors LLC, a Los Angeles firm that specializes in the ultrawealthy. “Clients had a bomb shelter mentality for a few years after the crisis, but that's receded the further we've gotten away.”
The report defines UHNW individuals as those with total net assets of at least $30 million.
The pace of growth among the ultrawealthy doesn't surprise Mr. Brothers, even as the U.S. economic recovery remains anemic and Europe has only begun to escape the grips of
recession. One reason is that they have access to the best
investment vehicles.
“The wealthier clients get to see products that are more cutting-edge,” he said. “Advisers bring them the best of what's out there.”
For example, ultrawealthy investors can invest in hedge funds, which require large upfront contributions.
“Hedge funds haven't been performing particularly well, but some of them have done really well,” Mr. Brothers said. “You have to know the good managers, the ones who really know what they're doing.”
The number of UHNW individuals living in emerging markets such as China and Brazil dropped, however, as did this group's total wealth. But while Asia as a whole delivered modest growth among the ultrawealthy (3.8% more individuals qualified, with 5.4% more total wealth), the number of Latin Americans qualifying as UHNW fell, as did their total wealth.
But the sudden slowdown in emerging markets, according to the report, shouldn't betray the continent's prospects for continued growth.
"The report forecasts that Asia will generate more UHNW individuals and wealth than the U.S. and Europe in the next five years,” Joseph Poon,
UBS Wealth Management's head of ultrahigh net worth, Southeast Asia, said in a statement. “This closely mirrors our own observations of the trajectory of wealth creation in Asia.”
In fact, Mr. Brothers' firm was
purchased last week by Montreal-based Fiera Capital Corp. and he's “curious as to whether we'll start seeing more wealth management firms that operate across borders.”
When it comes to the UHNW market and the type of expertise advisers need for this client base, Mr. Brothers doesn't see national origin as a noteworthy characteristic.
“There are no giant differences from UHNW clients in one country versus another,” he said. “They have a similar desire to keep all that money.”
