The acquisition of wealth by new billionaires in 2023 took an unexpected turn, as inheritance surpassed self-made success for the first time in the history of the UBS study. The report forecasts that over 1,000 billionaires will be transferring an astounding $5.2 trillion in wealth to their heirs over the next several decades.
While the number of new self-made billionaires still exceeded those who inherited their wealth, a larger portion of the overall wealth of new billionaires came from inheritance. This year witnessed a significant rise in the number of new billionaires, with nearly half of them originating from mainland China.
According to the UBS Billionaire Ambitions Report 2023, out of the $291.5 billion wealth controlled by the new billionaires, $150.8 billion originated from inheritance and $140.7 billion from self-made sources. This shift in the source of wealth has been anticipated by wealth managers due to the increasing number of billionaire entrepreneurs in recent decades.
China has firmly established its position as the leader in producing new billionaires, accounting for almost half of the total new entrants. The global number of billionaires saw a 7% increase this year, reaching 2,544. However, mainland China alone contributed a fifth of the overall number.
This year, there were 157 new billionaires, a significant increase from the 35 new entrants in 2022. While the number of new self-made billionaires exceeded those who inherited their wealth, the gap between the two categories has been narrowing. Most new billionaires who earned their wealth did so through the growth of their businesses, with 65% achieving their wealth through organic business activities.
Interestingly, despite inheriting their fortunes, only 43% of billionaire heirs chose to take up positions in the family business, with the rest pursuing their own careers. The study also revealed that 68% of first-generation billionaires aimed for philanthropic goals as the primary objective of their legacy, compared to only 32% of those who inherited their wealth.
The UBS report illuminated the investment preferences of new billionaires, with those who inherited their wealth showing a strong interest in private equity opportunities. On the other hand, self-made billionaires appeared to be more inclined towards fixed income investments.
The data from the report signifies a significant shift in the landscape of billionaire wealth creation, with inheritance playing a prominent role in the accumulation of wealth. With the rise of this trend, it will be intriguing to observe how future generations of billionaires choose to navigate their inherited fortunes.
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