The Rise of Inheritance: UBS Report Reveals New Billionaire Trends

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A recent report from UBS, a Swiss banking giant, has revealed that a significant number of newly minted billionaires have acquired their vast wealth through inheritance rather than through successful entrepreneurship. According to the report, 53 out of the 137 billionaires who gained their status in the 12 months leading up to April inherited a total of US$150.8 billion, surpassing the US$140.7 billion generated by 84 new self-made billionaires over the same period.

This marks the first time in the history of UBS’s annual Billionaire Ambitions Report, now in its ninth edition, that inheritance has overtaken entrepreneurship as the leading source of new billionaire wealth.

The report attributes this shift to subdued initial public offering markets throughout 2022 and early 2023, which limited opportunities for entrepreneurs to monetize the value of their businesses. UBS also anticipates that increasing numbers of aging tycoons will begin passing their massive wealth down to their heirs in the coming decades.

It is projected that over the next 20 to 30 years, more than 1,000 of today’s billionaires, aged 70 or older, will transfer more than US$5.2 trillion to their heirs. As these billionaire heirs inherit their parents’ businesses, investments, and foundations, many are choosing careers that align with their own ambitions, skills, and circumstances, focusing on opportunities such as innovative technologies, the clean-energy transformation, and impact investing.

Globally, the total number of billionaires grew by 7% to 2,544, with their combined wealth increasing by 9% to US$12 trillion. In the Asia-Pacific region, the number of billionaires increased to 1,019 from 922, with their total wealth expanding by 8.1% to US$3.7 trillion.

Interestingly, markets with smaller numbers of billionaires, such as Indonesia, the Philippines, Singapore, and Taiwan, experienced a significant increase in wealth. For example, Singapore saw its number of billionaires grow to 41 from 34, with their combined wealth ballooning 31.2% to US$135.8 billion. On the other hand, billionaire wealth fell in India and expanded more slowly in China.

Additionally, the average wealth of inheritors in the Asia-Pacific region was US$2 billion, compared with US$1.6 billion for entrepreneurs.

The report also highlighted that billionaires in the Asia-Pacific region tend to have a home bias, with many believing that the region offers the greatest opportunity for returns over the next 12 months. It is worth noting that the world’s largest concentration of billionaire wealth still resides in the Americas, despite minimal growth, with the number of billionaires growing by 12 to 867, accounting for a total of US$5 trillion.

In the Europe, Middle East and Africa (EMEA) region, billionaire families behind France’s luxury goods and cosmetics companies saw a significant increase in wealth due to a post-pandemic shopping splurge. The total wealth in the EMEA region grew by 21% to US$3.2 trillion, with the number of billionaires increasing by 10% to 658.

Overall, the report provides invaluable insights into the changing landscape of billionaire wealth, shedding light on the increasing influence of inheritance and the shifting trends within the world’s billionaire population. As the transfer of wealth to the next generation continues to unfold, it will be fascinating to see how it shapes the future of billionaire entrepreneurship and the global economy.

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