More females under the wealthiest people according to a report from UBS and PWC

Published by

Nov 8, 2019

Key findings:

  • Over the 15 years to the end of 2018, billionaire-controlled companies listed on the equity market returned 17.8 percent, compared with the 9.1 percent of the MSCI AC World Index
  • The strong dollar and volatile equity markets saw billionaire wealth decrease to USD 8.5 trillion after five years of growth
  • The Americas saw a slight increase in wealth, adding 33 new billionaires in 12 months
  • Tech billionaires saw their wealth increase more than any other sector last year, fuelled by existing businesses and disruptive new market entrants
  • Billionaires are now using their business experience to drive impact through philanthropy
  • The number of female billionaires has grown by 46 percent in five years

 

Zurich/London, 8 November 2019 – Billionaire-controlled companies have returned almost twice the average market performance over the past 15 years, new research published today reveals.

This is one of the findings of the annual UBS and PwC Billionaires Insights report, The Billionaire Effect. The report also reveals that, more broadly, billionaires’ wealth dipped by USD 388 billion in 2018, following five years of growth.

Asia’s billionaires saw a correction following five years of significant growth, during which their wealth almost quadrupled. By contrast, the Americas saw a slight wealth increase this year, led by prominent US tech billionaires. Despite slowing growth last year, billionaire wealth is over a third higher (34.5 percent) than five years earlier, amounting to an increase of USD 2.2 trillion.

Josef Stadler, Head of Ultra High Net Worth at UBS Global Wealth Management, commented on the new report: “The billionaire boom of the past five years has now undergone a natural correction. The stronger dollar, combined with greater uncertainty in equity markets amidst a tough geopolitical environment, has created the conditions for this dip.

“Nevertheless, it’s clear that billionaire businesses continue to thrive. Billionaires are creating and steering businesses that consistently outperform equity markets. This business acumen has also translated into their philanthropy, as billionaires seek new ways to engineer far-reaching environmental and social change. This ‘Billionaire Effect’ is alive and well across the world – and shows little sign of slowing.”

Key findings include:

The Billionaire Effect drives outperformance

  • Billionaire companies listed on the equity markets outperformed the global benchmark by 8.7 percent in the 15 years to the end of 2018.
  • Billionaire-controlled companies, both public and private, delivered a return on equity (ROE) of more than 16 percent over the 10 years to the end of 2018, again beating the MSCI AC World Index, which averaged slightly over 11 percent.
  • This Billionaire Effect can be attributed to billionaires’ appetite for smart risk-taking and their greater willingness to plan and invest for the long term.

Marcel Tschanz, Partner and Swiss Head Wealth Management, PwC Switzerland, said:

“First the EU action plan for Sustainable Finance, then the UN Sustainable Development Goals (SDGs) have shown the world how individuals and institutions are expected to foster sustainability. The broad public, however, is just catching up with our self-made entrepreneurs, who in the past years have transformed, innovated, and become more strategic in their ways of doing good”.

“Even if all the billionaires donated their total aggregated wealth of USD 8.5 trillion, they would not bridge the SDGs’ yearly funding gap, estimated at USD 7 trillion. Billionaires have taken up their responsibilities and a growing number of them are active in tackling world epidemic issues. It is up to all of us now to follow the leadership role billionaires have led, raise the power of technology and push for change”.

Billionaires are transforming the business of global philanthropy

  • Self-made billionaires are seeking new ways to make the world a better place. Traditional grant-giving is evolving into strategic philanthropy and championing some ambitious causes.
  • Philanthropists are also increasingly collaborating to make a difference, with other billionaires, NGOs, charities and governments.
  • Billionaires are using their wealth, problem-solving skills, networks and influence, to develop new models of philanthropy which achieve the greatest impact.

Women are joining billionaire ranks in greater numbers

  • The number of female billionaires has grown by 46 percent in five years - ahead of the growth rate of male billionaires in the same period (39 percent). There are now 233 female billionaires, up from 160 in 2013.
  • In Asia, over half (57 percent) of female billionaires are now self-made.
  • Four in 10 of 2018’s self-made female billionaires built businesses in the consumer and retail sector.

Billionaires are becoming entrepreneurial investors

  • Nearly four in ten UBS client advisors (39 percent) say their clients have purchased businesses in the past year. At the same time, many say their clients have sold businesses (33 percent) through trade sales or IPOs in the past 12 months, while a similar number (30 percent) expect clients to do so in the next year.
  • In order to safeguard record growth from the past five years, over one-fifth of client advisors say their billionaire clients have made significant changes to their investment strategies. Another 13 percent suggest their clients will do so in the next 12 months.

Other regional highlights include:

  • The Americas bucked the trend of dipping wealth, nudging upwards 0.1 percent. The net number of billionaires in the Americas also rose by 4.8 percent to 749 by the end of 2018. Growth was lifted by US tech titans, as existing entrepreneurs continued to maintain their growth and new entrants started to make good headway.
  • In EMEA, wealth dipped nearly 6.8 percent to USD 2.4 trillion. The number of European billionaires declined by 4.9percent to 598.
  • APAC remains the region with the highest number of billionaires globally. Nevertheless, the number of billionaires in APAC dropped from 7.4 percent to 754 in 2018. This masks considerable churn, as 169 people fell off the billionaire list and 110 new entrants emerged. China produced 56 billionaires in 2018, which equates to one per week.

Now in its fifth year, the Billionaires Insights Report draws on UBS and PwC’s extensive client network and access to data and aims to promote a deeper understanding of the billionaire population globally. Our research includes over 30 face-to-face interviews with billionaires and their heirs and, for the first time, a survey of over 100 UBS client advisors.


Articles authored by Martin Signer

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