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Where the Wealthiest Made, Lost Money in 2020

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What You Need to Know

  • Ultra-rich individuals with $30M or more in net worth represent just 1.2% of the world’s HNW population, but command 34% of global net worth.
  • Little difference was found in UHNW effects by gender, unlike in the general population.
  • Excluding billionaires, researchers found that only two of the five primary industry groups recorded an increased in related wealth.

The global pandemic and the attendant economic and social turmoil had differing effects on ultra-high-net-worth individuals’ private wealth in 2020, according to Wealth-X’s World Ultra Wealth Report 2021. 

Ultra-rich individuals with $30 million or more in net worth represent just 1.2% of the world’s high-net-worth population (individuals with $1 million of net worth), but command 34% of global net worth.

Last year, their numbers grew 1.7% to 295,450 individuals, and their combined net worth increased 2% to $35.5 trillion.

The report listed 10 countries that are home to three-quarters of the global ultra-high-net-worth population.

Pandemic Effects

Wealth-X researchers looked at how ultra-wealthy individuals’ net worth fared last year based on their gender, primary industry and age.

They found little difference in ultra-high-net-worth effects by gender in 2020 — in contrast to the general population, in which women disproportionately bore pandemic-related disruptions in employment and income.

The saving grace? Asset allocations of the ultra-wealthy, regardless of gender. Private and public holdings account for 56.2% of their assets, well above the proportion for people with lower levels of wealth, according to the report. 

Wealth-X said this reflects rich individuals’ tendency to either own or operate a business (or part of one) and to invest widely in public companies as part of wealth planning and protection strategies.

One thing that mattered greatly in terms of the effect of the pandemic on the ultra-wealthy was the primary industry of the individual, and last year, their fortunes fared differently depending on the industry they were attached to.

After excluding billionaires from their analysis, researchers found that only two of the five primary industry groups recorded an increased in related wealth in 2020:

  • Banking and finance, 24.7% of UHNW; year-over-year change, -0.3%.
  • Business and consumer services, 10.1%; y-o-y change, 0.8%.
  • Real estate, 6.8%; y-o-y change, -0.7%.
  • Nonprofit and social organizations, 6.5%; y-o-y change, 0.1%.
  • Hospitality and entertainment, 5.1%; y-o-y change, -0.3%.

The report noted that the marginal expansion of wealth in the nonprofit sphere largely reflects individuals’ asset allocations, a combination of public and private holdings and liquid assets. These assets are managed to protect their fortunes, some of which are devoted to philanthropic endeavors.

Age also had a bearing on the ultra-wealth performance in 2020. The fortunes of those under 50, the youngest and by far the smallest rich cohort in absolute numbers, grew by the largest margin, contributing nearly two-thirds of the overall 2% annual rise in total ultra-high-net-worth wealth. 

Technology as a primary industry accounted for a greater proportion of individuals in this group than in others, the report said. 

The wealth of those between 50 and 70, the largest age group, grew at the second-fastest rate in 2020, contributing 0.5% to ultra-high-net-worth wealth growth. Banking and finance, the growing business and consumer services sector and technology helped to propel this expansion. 

About a third of the ultra-wealthy individuals are older than 70. Many continue to be active in their business operations to varying degrees, but researchers found a clear shift to spending a larger proportion of their time on philanthropic initiatives. 

According to the report, this may partly explain the group’s negligible contribution to overall ultra-high-net-worth wealth growth last year. The performance of their private and public holdings — and their liquid assets’ exposure to foreign currency movements in various parts of the world — also played a role.