Billionaire Census - Wealth-X · In terms of billionaire representation and total wealth, however,...

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BILLIONAIRE CENSUS 2017 APPLIED WEALTH INTELLIGENCE

Transcript of Billionaire Census - Wealth-X · In terms of billionaire representation and total wealth, however,...

Page 1: Billionaire Census - Wealth-X · In terms of billionaire representation and total wealth, however, the technology sector still lags well behind the finance, banking and investment

BILLIONAIRE CENSUS 2017

APPLIED WEALTH INTELLIGENCE

Page 2: Billionaire Census - Wealth-X · In terms of billionaire representation and total wealth, however, the technology sector still lags well behind the finance, banking and investment

© WEALTH-X 2017

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BILLIONAIRE CENSUS 2017

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WEALTH-X BILLIONAIRE CENSUS 2017

TABLE OF CONTENTS

EXECUTIVE SUMMARY __________________________________________1

INTRODUCTION _______________________________________________3

GLOBAL BILLIONAIRE MAP _____________________________________4

BILLIONAIRES IN 2016: RISING RISK AND FALLING RETURNS _____________________________6

BILLIONAIRE WEALTH TIERS _________________________________ 10

LOOKING AHEAD: FOUR ISSUES FOR BILLIONAIRES TO CONSIDER IN 2017 AND BEYOND _____________________________13

TOP 30 BILLIONAIRE COUNTRIES _______________________________18

TOP 30 BILLIONAIRE CITIES ___________________________________20

TODAY’S BILLIONAIRES: ASSET HOLDINGS, INDUSTRY, GENDER AND WEALTH SOURCE _______________________________ 22

BILLIONAIRE ARCHETYPES ___________________________________ 27

BILLIONAIRE CALENDAR _____________________________________30

METHODOLOGY ____________________________________________ 33

ABOUT WEALTH-X __________________________________________ 33

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1WEALTH-X BILLIONAIRE CENSUS 2017

EXECUTIVE SUMMARYA DECLINE IN BILLIONAIRE POPULATION AND WEALTH. In 2016, the total number of billionaires (as defined by net worth) declined by 3.1% to 2,397 individuals, the first annual fall since the global financial crisis. The combined wealth of the global billionaire population also slipped back, dropping by 3.7% to $7.4trn. These falls should be kept in perspective, however, with the number of billionaires and total wealth still higher than their 2014 levels.

THE AMERICAS LEAD THE WAY AS ASIA-PACIFIC STRUGGLES. In contrast to the pattern of recent years, the Asia-Pacific region recorded a sizeable fall in its billionaire population in 2016. Europe, the Middle East and Africa (EMEA) retained its status as the region with the largest number of billionaires but this also declined on an annual basis. The Americas represented the only region to record an increase in its billionaire population and wealth.

THE UNITED STATES IS THE DOMINANT PLAYER, BOOSTED BY THE DOLLAR AND

TECHNOLOGY. The US was the only one of the nine largest billionaire countries to see a rise in either its billionaire population or wealth in 2016. Buoyed by a stronger dollar and a robust tech sector, the total net worth of American billionaires rose to $2.6trn, equivalent to the combined billionaire wealth of Europe and the Middle East.

FLUCTUATING FORTUNES ARE A COMMON OCCURRENCE. While the global billionaire population in aggregate recorded a fall in total wealth of 3.7% in 2016, just under three-quarters of billionaires experienced a rise or fall in their personal fortunes of more than 5%, while one in five experienced a fluctuation of more than 20%, highlighting the volatile nature of extreme wealth creation.

NEW YORK AND SAN FRANCISCO ARE AMONG THE MOST POPULAR BILLIONAIRE

CITIES. New York retained its number-one billionaire city ranking. The city is home to more billionaires than almost every country in the world, with the exception of China and Germany. San Francisco rose to fifth place in the rankings, adding more billionaires (10) in 2016 than any individual country (other than the US), an indication of the driving force of the technology sector in wealth creation.

TECHNOLOGY-SOURCED WEALTH IS GROWING FAST. The average net worth of tech billionaires totalled $5.2bn in 2016, compared with average global billionaire wealth of $3.1bn. Around half of the 115 tech billionaires are below the age of 50, against a 14% share for all billionaires. In terms of billionaire representation and total wealth, however, the technology sector still lags well behind the finance, banking and investment industries, which had four times as many billionaires, with a total net worth more than twice as large.

A MORE CHALLENGING PERIOD. The uncertain outlook for billionaire wealth creation is set to continue in 2017 amid dramatic shifts in the geopolitical environment. At the same time, transformative technologies are ‘disrupting’ long-established industry norms. This new outlook leaves billionaires with much to contemplate, both professionally and personally, over the coming year and beyond.

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INTRODUCTION

The Wealth-X Billionaire Census 2017 analyses the status of the world’s billionaires, who, despite being modest in number, hold immense wealth and wield a significant influence over the global economy. This report offers a comprehensive study of developments across the billionaire population in 2016. It considers regional trends and changes in individuals’ net worth and provides a breakdown of billionaires’ asset holdings, industry focus and source of wealth. We explore the volatile nature of billionaire wealth, assessing the new entrants into this exclusive club and those who lost their billionaire status. And we also draw on our extensive knowledge base to rank the leading billionaire countries and cities of the world.

The report also looks ahead, analysing how the recent dramatic shift in the geopolitical environment could affect the billionaire population in 2017 and beyond. We explore some of the issues that billionaires may face in response to a gradual retreat from globalisation at a time of elevated economic uncertainty. We also examine other challenges for billionaires, such as legacy issues of wealth transfer and philanthropy and how rapid technological advances are exposing a growing number of billionaire businesses to digital ‘disruption’.

The Billionaire Census 2017 also investigates the similarities and differences of four archetypal groups: those who inherited their wealth; those primarily based in the tech industry; those who attended Harvard University, the most popular alma mater of the global billionaire population (including some notable dropouts who founded Microsoft and Facebook); and the population of Chinese billionaires. This deep-drill highlights the variety of channels through which 10-figure fortunes can be created and reveals contrasting trends across the selected billionaire groups.

Wealth-X’s comprehensive database of billionaires (as defined by net worth) provides an unrivalled insight into not only where the world’s billionaires have come from, and their status today, but also offers a glimpse into the wealth landscape of the future.

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GLOBAL BILLIONAIRE MAP

% Change in wealth from 2015

-3.7%% Change in population from 2015

-3.1%

2016Billionaire

population and total wealth

2,397Number of billionaires

$7,400Total wealth ($bn)

32%

27%

of the world’s billionaires%

8.0%

AFRICA

$93bn-5.1%

41 0.0%

EUROPE

$2,124bn-8.8%

757 -6.1%MIDDLE EAST

$464bn

169 1.8%

3.1%

ASIA

$1,583bn-6.1%

607 -5.9%

NORTH AMERICA

$2,664bn4.0%

654 4.1%

LATIN AMERICA & THE CARIBBEAN

$409bn-16.2%

144 -6.5%PACIFIC

$63bn-10.0%

25 -24.2%

25%

7%

6%2%

1%Source: Wealth-X

5WEALTH-X BILLIONAIRE CENSUS 20174 WEALTH-X BILLIONAIRE CENSUS 2017

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The year 2016 was a challenging one for the global billionaire population. The total number of billionaires declined by 3.1% to 2,397 individuals, the first annual fall since the global financial crisis. The combined wealth of the world’s billionaires also took a hit, dropping by 3.7% to $7.4trn.

This decline from the record-high levels of 2015 shows a loss of momentum in recent wealth creation. It has occurred against a backdrop of heightened geopolitical instability and still subdued trends in the global commodity, financial and consumer markets. It is important to place this weaker performance in context: the total number of billionaires today is still higher than in 2014, as is their combined wealth. Nevertheless, digging a little deeper into the 2016 data shows that there were marked fluctuations in the personal wealth of a sizeable share of the global billionaire population, underlining the sometimes volatile nature of extreme wealth creation.

STRONG DOLLAR EFFECT

Amid this uncertainty, a strong US dollar was a key driver of the contrasting regional fortunes of the global billionaire population. Boosted by a vigorous ‘Trump reflation trade’ in the financial markets late in the year, the Americas recorded by far the best performance of the three main regions, being the only one to post a modest increase in the number of billionaires and their combined wealth. This was due almost exclusively to a strong 6% rise in the billionaire population of the US – consolidating its position as the world’s dominant billionaire country – which more than offset falls elsewhere in the region (notably in Canada and Mexico).

Asia-Pacific suffered the largest fall in billionaire population, down by 6.8%, alongside a 6.3% decline in wealth. This was a sharp reversal of the double-digit growth rates recorded in 2015, driven in part by currency weakness and outflows of capital from most emerging economies. In China, the second largest billionaire nation in the world, the benchmark Shanghai Stock Exchange tumbled by 12.5% in 2016 1, contributing to a 4% drop in the country’s billionaire population.

BILLIONAIRES IN 2016RISING RISK AND FALLING RETURNS

1 - http://www.scmp.com/news/china/economy/article/2058144/china-stock-markets-among-worlds-worst-performers-2016

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7WEALTH-X BILLIONAIRE CENSUS 2017

Region

2016 2015

EMEA

The Americas

Asia Pacific

967

798

632

2,681

3,073

1,646

1,013

782

678

2,878

3,049

1,756

-4.5

2.0

-6.8

-6.8

0.8

-6.3

Number of billionaires

Number of billionaires

Change in population

Total wealth ($bn)

Total wealth ($bn)

Change in wealth

World 2,397 7,400 2,473 7,683 -3.1 -3.7

Source: Wealth-X

Europe, the Middle East and Africa (EMEA) retained its status as the region with the largest billionaire population (967 individuals) but this was down 4.5% on the previous year, while the combined wealth of the region sank by 6.8%. This mostly reflected the weaker trend in Europe, where a 6.1% fall in the billionaire population saw an 8.8% slump in wealth. In contrast, the Middle East experienced modest growth in billionaire numbers and wealth. Some support will have come from the gradual recovery in global commodity markets, particularly in oil prices. However, as we have highlighted in previous Billionaire Census reports, Middle Eastern billionaires rank highly for the international diversification of their investment and business holdings.

THE TOTAL NUMBER OF BILLIONAIRES DECLINED BY 3.1% TO 2,397 INDIVIDUALS IN 2016, THE FIRST ANNUAL

FALL SINCE THE GLOBAL FINANCIAL CRISIS.

% Change % Change

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CHANGE IN WEALTH ($BN) 2015-2016

2015 billionaires

2016 billionaires

+ $344bn

- $225bn

New billionaires

Change in wealth of existing

billionaires

Former billionaires

- $402bn

$7,400bn$7,683bn

CLOSE TO THE EDGE

More than 10% of 2015’s billionaires no longer appear in the latest Billionaire Census, highlighting the sometimes fleeting nature of extreme wealth. As shown in our wealth tiers pyramid (page 10), over half of the world’s billionaires in 2016 had a net worth of between $1bn and $2bn. Given the volatility of today’s global asset markets, those individuals close to the $1bn wealth threshold are subject to significant daily fluctuations that can push them into, or exclude them from, the billionaire list.

Source: Wealth-X

Those who lost their billionaire status in 2016 did so for a variety of reasons. These include a decline in net worth arising from a fall in the value of their business and investment holdings (lower stock prices of publicly held companies and/or lower valuation multiples of privately held assets), the adverse impact of foreign-exchange movements on their US dollar-denominated wealth, and the dilution of their fortunes as a result of intergenerational transfers and philanthropic donations to charity. In addition, a number of billionaires also passed away in 2016.

Some of the 207 new billionaires inherited their wealth from a deceased family member (causing no net change in the total billionaire population), while a number of former billionaires regained their status in 2016. Of those who joined the billionaire ranks for the first time in 2016, some experienced a relatively modest increase in their net worth – moving them from just below to just above the $1bn threshold – while others increased their wealth more dramatically.

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9WEALTH-X BILLIONAIRE CENSUS 2017

BILLIONAIRE CHANGE IN WEALTH 2015-2016

0

100

200

300

400

500

600

700

283 282

627

471

567

243207

No longerbillionaire

Fall of greater

than 20%

Fall between

5% and 20%

Plus/minus 5%

Gain between

5% and 20%

Gain of more

than 20%

New billionaires

NU

MB

ER

OF

BIL

LIO

NA

IRE

S

VOLATILITY AMID STABILITY

The larger group of individuals, who remained members of the billionaire club in 2015 and in 2016, suffered a cumulative decline in their net worth of $225bn in 2016, an indication of the more demanding market conditions faced by the global billionaire population.

More illuminating still is the fact that this net reduction in wealth disguised some fairly extreme swings in the level of wealth at an individual level, highlighting the volatile nature of extreme wealth creation and the challenges of wealth preservation. Only around one-fifth of billionaires in 2016 maintained a reasonably stable level of personal wealth, whereas almost two-fifths experienced a drop in their fortunes of more than 5%. Of these, just under half (282 individuals) suffered a slump in their net worth of more than 20%. Large-scale wealth creation was still possible, however, with 243 billionaires increasing their net worth by more than 20% during the course of the year.

New billionaires and those individuals who lost their billionaire status in 2016 largely mirror the billionaire population at large. Yet there are a few differences of note. Both groups contain a slightly higher proportion of self-made individuals, demonstrating the greater volatility in the value of their asset holdings, which are often concentrated in a single company. Among new billionaires, the robust tech sector was evident in 2016, with technology as a primary industry accounting for 9% of all new billionaires in comparison with 4.8% among the general billionaire population. Meanwhile, following the tumultuous performance of global commodity markets over 2015-6, those who lost their billionaire status showed a greater representation (6.5%) in the oil, gas and consumable fuels sector than among the general billionaire population (2.9%). Those who lost their billionaire status also lost an average of just under 40% of their net worth in 2016.

Source: Wealth-X

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11WEALTH-X BILLIONAIRE CENSUS 201710 WEALTH-X BILLIONAIRE CENSUS 2017

NUMBER OF BILLIONAIRES

TOTAL WEALTH ($bn)

$1bn-$2bn

$2bn-$5bn

$5bn-$10bn

$10bn-$25bn

$25bn-$50bn

$50bn+5

30

91

239

806

1,226

316

792

1,100

1,357

2,270

1,565

WEALTH TIER

BILLIONAIRE WEALTH TIERS

Compared with the cohort of other wealthy individuals, the billionaire population accounts for just 1% of the total number of ultra high net worth (UHNW) individuals (those with more than $30m in net worth) but approximately 25% of their combined net worth. However, it is important to note that this skewed distribution of wealth does not end once billionaire status is attained. Indeed, it becomes increasingly imbalanced as one moves higher up the different tiers of billionaire wealth.

Average billionaire wealth in 2016 was $3.1bn, down marginally from a year earlier (median wealth was unchanged at $1.9bn). Just over half of all billionaires had a net worth of less than $2bn, with 95% holding a personal fortune of between $1bn and $10bn. The remaining 126 individuals accounted for a 30% share of billionaires’ combined net worth, with the top 1.5% controlling 15% of all global billionaire wealth.

The only billionaire wealth tier to expand in size in 2016 was that of $5bn-$10bn. This was mainly attributed to a net balance of billionaires experiencing a decline in their personal fortunes, resulting in them falling back from the wealth tier above ($10bn-$25bn). This tier showed the largest fall in combined billionaire wealth.

Even the most exclusive wealth tier – containing just five people, each with a net worth of more than $50bn – posted a decline in combined fortunes of $7bn. This select group accounts for 0.2% of the global billionaire population yet holds 4.2% of all billionaire wealth. These individuals’ average net worth of $63bn is 20 times higher than the average wealth of all the world’s billionaires.

$7,400 ($bn)

2,397Billionaires

2016-3.7%-3.1%

% Change in wealth from 2015

% Change in population from 2015

Source: Wealth-X

JUST OVER HALF OF ALL BILLIONAIRES HAD A NET WORTH OF LESS THAN $2BN, WITH 95% HOLDING A PERSONAL

FORTUNE OF BETWEEN $1BN AND $10BN

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Wealth tier ($)

GROWTH RATE 2015-2016

ABSOLUTE CHANGE 2015-2016

$25bn-50bn

$10bn-25bn

$5bn-10bn

Number of billionaires

Number of billionaires

Total wealth ($bn)

Total wealth ($bn)

$50bn +

$2bn-5bn

$1bn-2bn

Total

-9.1%

-17.3%

6.7%

0.0%

-0.9%

-4.8%

-3.1%

-9.0%

-17.9%

8.6%

-2.2%

-0.4%

-3.4%

-3.7%

-78

-240

107

-7

-10

-55

-283

-3

-19

+15

0

-7

-62

-76

Source: Wealth-X

THE ONLY BILLIONAIRE WEALTH TIER TO EXPAND IN SIZE IN 2016 WAS THAT OF $5BN-$10BN. THIS WAS MAINLY ATTRIBUTED TO A NET BALANCE OF BILLIONAIRES EXPERIENCING A DECLINE

IN THEIR PERSONAL FORTUNES, RESULTING IN THEM FALLING BACK FROM THE WEALTH TIER ABOVE ($10BN-$25BN).

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LOOKING AHEADFOUR ISSUES FOR BILLIONAIRES TO CONSIDER IN 2017 AND BEYOND

HOW SHOULD I REACT TO THE SHIFT AWAY FROM GLOBALISATION?

The year 2016 was momentous for politics – Donald Trump’s victory in the US presidential election and the UK’s decision to leave the European Union clearly revealed deep popular dissatisfaction with the status quo and a desire for change. Anti-elite sentiment was also a strong driver of Rodrigo Duterte’s rise to power in the Philippines. To many, such outcomes had appeared improbable just a year before, underlining the pace of change in the political economy. These changes may precede other populist challenges, particularly across Europe, with voters heading to the polls in France, Germany and the Netherlands in 2017. Major elections are also scheduled in Iran, South Korea and Thailand.

For most of the past 30 years, the globalisation of finance, trade and investment has continued unabated. The rise of the internet, the art of financial

engineering and the Asian consumer boom have provided unique opportunities for a number of entrepreneurs to amass huge levels of wealth. Open markets, lower trade barriers and labour migration have been prominent features of this liberal trading order.

The period since the global financial crisis, while still offering plentiful chances to drive billionaire wealth, has nevertheless seen a gradual push against these trends. Global trade growth has slowed markedly, the financial sector has been squeezed and emerging-market demand has softened. The America First stance of President Trump, the anti-immigrant tone of the UK Brexit debate and firmer support for populist movements around the world point to a further retreat from peak globalisation – and a risk that this could spur a broader wave of protectionism.

The geopolitical environment shifted dramatically in 2016. A new technocratic era in American politics has raised the prospect of a major shake-up of the post-war global trading system and a realignment of international relations. Rising public dissatisfaction with political elites and institutions around the world is being manifested in more strident views on immigration, deindustrialisation and climate change. At the same time, transformative technologies are disrupting long-established industry norms. Amid this heightened volatility, legacy issues of wealth transfer and philanthropy will become more important to the world’s billionaires.

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14 WEALTH-X BILLIONAIRE CENSUS 2017

How will my business cope in this changing environment? Will supply chains be disrupted? Will market access be restricted or become more expensive? Will I be able to recruit and retain international talent?

Should I move the location of my primary business? Will the America First policy hinder access to the largest economy in the world? How will the UK’s exit from the EU (the single market and, most likely, the customs union) affect my business interests? If I have been using the UK as a gateway to the European market, should I relocate to the continent?

As a billionaire who travels frequently and is a global citizen, will I still be welcomed around the world? Should I change my primary business location or move back to my home country?

The ripple effects of this ‘deglobalisation’ shift are impossible to predict and may, ultimately, prove to be less severe than many fear. However, there is little doubt that the international environment is more unstable than it has been for some time, with increased uncertainty over political outcomes, policy direction and growth prospects raising many questions for the billionaire population:

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The rapid global adoption of digital technology has enabled the tech sector to emerge as the fifth most popular industry for billionaires. Some have enjoyed strong wealth gains in recent years, driven by rising demand for mobile data services and payment systems, e-commerce, cloud computing, social media and connected software. Innovations such as Snapchat and Airbnb in the US, and Ant Financial and Didi Chuxing in China, have become hugely popular among millions of people in only a few years.

The population of tech billionaires is relatively modest in size, accounting for less than 5% of the total number of billionaires globally. However, their influence is increasing by the day and as “software eats the world” (famously stated by tech billionaire Marc Andreessen2), the 95% of non-tech billionaires have become increasingly accustomed to looking over their shoulder, wondering whether their industry will be the next to suffer from digital disruption. From retail to manufacturing, from telecoms to automotive, the impact of digitalisation is everywhere to see.

The ongoing race to develop self-driving cars provides a good example of this disruptive behaviour. The main companies currently taking the lead in autonomous vehicles are technology groups such as Uber (founded in 2009) and Waymo, formerly the Google self-driving car project that started in 2009, as well as electric-vehicle maker Tesla (founded in 2003). It is striking that these relative newcomers are at the forefront of a battle that could transform the entire concept of personal transportation, although traditional carmakers have also become involved.

The span of technology firms continues to grow. The sector is home to five of the world’s six largest companies (in terms of market capitalisation3) – Apple, Alphabet, Microsoft, Amazon and Facebook – and the ambition of tech billionaires shows no signs of abating. Mergers and acquisitions in the sector reached a record level in 2016 and the leading companies have substantial liquidity – in the form of hundreds of billions of US dollars in cash – ready to deploy in new fields and innovations.

AS SOFTWARE ‘EATS THE WORLD’, WILL MY INDUSTRY BE DISRUPTED?

2 - https://www.wsj.com/articles/SB10001424053111903480904576512250915629460

3 - http://dogsofthedow.com/largest-companies-by-market-cap.htm

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In 2016, the global billionaire population declined for the first time since 2009 and billionaire wealth fell in many countries around the world (see page 18 — Top 30 Billionaire Countries). The US was a rare exception, buoyed by a strong dollar and a dynamic tech sector, but the broader trend was a loss of momentum. Against a backdrop of heightened geopolitical instability and trade-dampening protectionist rhetoric, the prospects for 2017 appear mixed. There is understandable uncertainty among billionaires as to where growth – to drive wealth creation and the success of their primary companies – is likely to come from.

Uncertainty reigns on a macroeconomic level, leading to a wide range of forecast growth rates for the years ahead. Analysts are grappling with the myriad outcomes that could result from US policy upheaval, the UK’s formal exit from the EU, a potential political storm in Europe and growing fears of a slowdown in China. Near-term growth prospects have been revised down for a number of other large economies — most notably India, Brazil and Mexico – according to the latest International Monetary Fund World Economic Outlook4. These growth

questions are important for the many billionaire-owned firms. These companies are awash with liquidity and seeking returns in the ultra-low-interest-rate environment. Cash-flush portfolios have supported strong global divestment M&As in recent years but IPO activity declined sharply in 2016.

Looking beyond the more unpredictable growth outlook, there are concerns of secular stagnation taking hold. Many of the short-term corporate gains from peak globalisation have faded and companies are now having to adapt to signs of a gradual retreat from open markets and mobile labour. Advantages of scale are diminishing as nimbler domestic competitors gain market share. Multinationals, which have created much of the billionaire wealth of recent years, face the challenge of gaining further efficiencies while complying with a more demanding (and costly) global regulatory rule book.

WHERE WILL GROWTH COME FROM?

4 - http://www.imf.org/external/pubs/ft/weo/2017/update/01/

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17WEALTH-X BILLIONAIRE CENSUS 2017

The world’s billionaires are members of a very exclusive group – there is one billionaire for every three million people on the planet – and the vast majority are aware of their good fortune. Many billionaires want to make the world a better place, with more than half either undertaking or being interested in philanthropic activities, according to Wealth-X data. Holding such elevated levels of wealth makes engaging in significant philanthropy far more possible than for most individuals, but it also brings additional responsibility for billionaires, and may lead to doubts over whether they are doing enough.

This goes beyond just the size and scale of philanthropy. Questions arise as to whether billionaires are giving in the best and most effective manner possible, whether they are supporting the next generation of their family through succession planning and whether they are creating a sustainable legacy. Not all family members want to inherit the family business, whether for cultural, political or personal reasons, and the success of parents can intimidate children wanting to start new ventures themselves. However, ensuring the success of all family members can lead to dynastic wealth and a greater legacy. For more issues relating to family legacies, see Wealth-X’s Preparing for Tomorrow: A Report on Family Wealth Transfer.

The Giving Pledge was initiated by Bill and Melinda Gates and Warren Buffett in 2010 to inspire the world’s wealthiest individuals to dedicate most of their wealth to philanthropy. It has seen a steady increase in billionaire members, with around 150 individuals and their families signing up. However, 94% of the global billionaire population have not joined the initiative. This may be because some prefer to give anonymously or in a more private manner, while others may be planning to donate substantial amounts – but not specifically more than half of their wealth – to philanthropic causes.

The means by which billionaires can engage in philanthropy are now broader than ever, whether through private foundations, loans, guarantees or impact-investing models. To maximise the return on giving, a growing number of billionaires are now employing more data-intensive methods. These enable them to leverage their philanthropy as they would a financial investment and to measure more accurately whether they are doing enough in terms of the potential benefits.

AM I DOING ENOUGH?

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18 WEALTH-X BILLIONAIRE CENSUS 2017

Here we highlight the most notable country findings:

¡ The top 30 countries accounted for 88% of the global billionaire population and 91% of global billionaire wealth in 2016 – the same shares as a year earlier. However, in absolute terms, there were 78 fewer billionaires in the top 30 countries (down to 2,108) compared with 2015, while billionaires’ collective wealth declined by an annual $264bn to $6.7trn.

¡ Of these 30 countries, 15 are in EMEA, 10 are in Asia-Pacific and the remaining five are in the Americas. EMEA has the largest billionaire population but the Americas have the highest collective billionaire wealth.

¡ The US strengthened its position at the top, being the only one of the nine largest billionaire countries to see a rise in either its billionaire population or wealth in 2016. Buoyed by a stronger dollar and a robust tech sector, the total net worth of American billionaires rose to $2.6trn, equivalent to the combined billionaire wealth of Europe and the Middle East (or the combined wealth of the rest of the top 10 billionaire countries).

¡ Excluding the US, the global billionaire population would have declined by 7.1% in 2016, more than double the actual rate of 3.1%, while collective billionaire wealth would have fallen by 8.3%.

¡ Of the 30 largest billionaire countries, only five recorded a rise both in their billionaire population and wealth in 2016. The US led the way with 35 new billionaires, more than double the combined total of 14 in the other four countries (United Arab Emirates, Italy, Spain and Japan).

¡ Germany, the UK, Hong Kong and Brazil were among the countries recording the largest falls in billionaire net worth in absolute terms. In each country, the collective billionaire wealth was more than $40bn lower than in 2015.

TOP 30 BILLIONAIRE COUNTRIES

Rank

1 2,580

7 199

14 128

2 670

8 236

15 73

3 368

9 177

16 54

Total wealth ($bn)

4 319

10 161

17 84

5 253

11 183

18 82

20 61

6 226

13 125

12 140

19 122

=22

28

=22

=29

55

32

98

36

21 56

=22

=29

53

29

26 51

=22 39

27 40

United States

Saudi Arabia

United Kingdom

Italy

Mexico

Germany

France

Canada

India

Singapore

South Korea

China

United Arab Emirates

Switzerland

Spain

Thailand

Russia

Brazil

Japan

Hong Kong*

Turkey

Australia

Luxembourg

Netherlands

Israel

Country

Chile

Taiwan

Austria

Indonesia

Norway

620

57

94

44

28

129

49

34

85

37

23

249

52

86

38

25

100

46

31

72

35

22

18

22

17

Number of billionaires

22

21

15

22

15

6.0

-5.6

5.6

-4.2

-19.1

0.0

-0.8

-3.4

-7.9

Change in population (%)

-15.3

8.3

-20.9

-11.3

-5.8

14.8

4.2

-9.5

10.0

-22.0

-3.4

-26.7

-5.6

-15.4

-16.7

-8.0

-12.0

0.0

-16.0

4.8

0.0

4.6

-3.4

0.8

-0.7

-18.9

-2.7

-13.0

-2.2

-5.3

Change in wealth (%)

-8.3

5.9

-11.6

-14.2

-11.2

1.2

-6.2

-3.8

1.6

-24.7

-25.2

-11.3

-8.6

-2.0

-20.0

-13.8

-11.7

-3.3

-1.9

-7.1

-24.5

Source: Wealth-X, 2016

19WEALTH-X BILLIONAIRE CENSUS 2017

*Hong Kong is a semi-autonomous, special administrative region of China

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20 WEALTH-X BILLIONAIRE CENSUS 2017

The world’s leading cities are a natural magnet for the billionaire population. They offer not only financial strength and highly developed business infrastructure but also a desirable mix of cultural diversity, luxury shopping, high-quality education and a social network of other billionaires. Given the globalised focus of many billionaires, such cities also provide extensive transport links for the ease of business and leisure travel. That said, a city’s size, appeal and prestige will not always correlate directly with the number of billionaires residing there. As our list of top 30 cities shows, a key determinant of billionaire wealth is also the location of specific industry clusters, whether that be finance, technology, commodities or retail.

In 2016, of a total of 946 billionaires, some 40% had a primary location in one of the top 30 cities. This was down slightly from the 977 billionaires based in the top 30 cities a year earlier, broadly in line with the overall decline in the global billionaire population between 2015 and 2016.

UPS AND DOWNS

New York retained its number-one ranking from 2015, with its billionaire population rising above 100. The city is home to more billionaires than almost every country in the world, with the exception only of China and Germany. New York extended its lead over its nearest rivals as Hong Kong, Moscow and London all lost billionaire numbers. Hong Kong suffered the largest fall of all 30 cities, losing 17 billionaires, driven in part by a falling stock market and weaker economy. Despite these fluctuations, the top seven billionaire cities were ranked in the same position as in 2015.

San Francisco (including the wider Bay Area) was home to a total of 60 billionaires in 2016, lifting the city to fifth place in the rankings. The increase of 10 billionaires in San Francisco was more than any individual country (other than the US) achieved in 2016, and accounted for almost one-third of the overall growth in the US billionaire population. Primarily driven by the tech industry, the city is home to some of the wealthiest individuals in the world – Sergey Brin, Larry Page, Larry Ellison and Mark Zuckerberg are all household names with fortunes of $40bn and above. As we highlighted on page 15, the continued growth of the tech industry globally is likely to keep other billionaires looking over their shoulders in the coming years, worried that their industries will be the next to be disrupted. Further down the rankings there were larger than average falls in the billionaire populations of São Paulo, Istanbul and Mexico City.

CONCENTRATION

The US accounts for the largest share of the world’s leading billionaire cities, with six of the top 30, followed by China with four. Despite boasting the third-highest number of billionaires of any country, Germany only has one city – Hamburg – in our top 30 list. This highlights how Germany’s substantial billionaire wealth is dispersed across the country, reflecting the federalised structure of its economy. Hamburg accounted for 12% of Germany’s billionaire population in 2016, slightly below New York’s 16% share of all US billionaires. In contrast, London was home to two-thirds of all UK billionaires, while Moscow accounted for 71% of the total billionaire population of Russia.

TOP 30 BILLIONAIRE CITIES

New York 1

Dubai =7

London 4

São Paulo =10

Hangzhou 18

Moscow 3

Mumbai =10

Tokyo =16

Beijing 6

Riyadh 14

Houston =20

Hong Kong 2

Los Angeles 9

San Francisco 5

Istanbul 13

Shanghai 19

Paris =10

Jeddah =16

Singapore =7

Shenzhen 15

Mexico City =20

Hamburg =26

Santiago =20

Luxembourg =26

Chicago =23

Washington DC 25

Geneva =26

Seoul =23

Taipei =29

102

72

71

62

60

38

37

37

32

29

29

29

28

24

23

22

22

21

20

19

19

19

18

18

17

16

16

16

15

Madrid =29 15 +2

-3

-1

0

0

+2

-1

-2

0

-4

0

-1

-1

-1

+3

-1

0

-4

-7

0

-2

-1

+2

0

0

+10

-6

-3

-17

+5

Change in population (number of individuals) year-on-yearNumber of billionaires 2016

Source: Wealth-X

THE INCREASE OF 10 BILLIONAIRES IN SAN FRANCISCO WAS MORE THAN ANY INDIVIDUAL COUNTRY (OTHER THAN THE US) ACHIEVED IN 2016.

THE WORLD’S LEADING CITIES ARE A NATURAL MAGNET FOR THE

BILLIONAIRE POPULATION.

21WEALTH-X BILLIONAIRE CENSUS 2017

City/rank

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22 WEALTH-X BILLIONAIRE CENSUS 2017

A breakdown of the global billionaire population by their asset holdings, industry focus, gender and wealth source – and an analysis of the changes that occurred in 2016.

TODAY'S BILLIONAIRESASSET HOLDINGS, INDUSTRY, GENDER AND WEALTH SOURCE

ASSET ALLOCATION

Source: Wealth-X

Total billionaire wealth fell by almost $300bn in 2016, which was caused primarily by a sharp decline in the value of privately held assets. While still accounting for the largest share of billionaires’ portfolios, at 38.7%, this was down from 46% in 2015. In contrast, the stock of liquid assets and public holdings both increased – in absolute terms and as a proportion of billionaires’ wealth. These developments reflect the more uncertain global environment, with subdued demand, low interest rates, tighter regulation and widening valuation gaps limiting the potential for organic business growth.

Instead, billionaires are preferring to keep their money off the table where possible. As we noted in the Billionaire Census 2015-2016, liquidity has been rising steadily since 2012 and it reached a new high of $1.9trn in 2016, equivalent to one-quarter of billionaires’ net worth. This highlights the spending potential of the world’s ultra-rich – despite the 3.7% hit to their total wealth in 2016 – as they seek advantageous investment opportunities. A share of 3% of billionaires’ net worth is held in real estate and luxury assets (such as yachts, planes, cars and jewellery), equivalent to approximately $100m in luxury holdings per individual.

2016

Public holdings

Liquid assets (cash)

Real estate and luxury assets

Private holdings

2,435

1,880

220

Wealth ($bn)

2,865

32.9

25.4

3.0

% share

38.7

2,160

1,705

285

Wealth ($bn)

3,535

28.1

22.2

3.7

% share

46.0

2015

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23WEALTH-X BILLIONAIRE CENSUS 2017

PRIMARY INDUSTRY 2016

Finance/Banking/Investment 488

Manufacturing 119

Industrial conglomerates 343

Technology 115

Number of billionaires

Real estate 158

1,430 2.9

339 2.8

1,066 3.1

600 5.2

Billionaire wealth ($bn)

Average wealth ($bn)

368 2.3

Source: Wealth-X

Billionaire representation in the technology sector continued to grow in 2016, taking the sector to fifth position overall, with an average net worth of $5.2bn. When compared with average global billionaire wealth of $3.1bn, this highlights the very large fortunes that can be made in more innovative ‘winner-takes-all’ markets. Six of the 10 richest people in the world have made their fortunes in technology and the five largest tech companies (Apple, Alphabet, Microsoft, Amazon and Facebook) have a combined market capitalisation of $2.5trn5– greater than the total market value of all constituent companies in the UK’s FTSE100 index.

In terms of billionaire representation and total wealth, however, the technology sector still lags well behind the finance, banking and investment industries, which had four times as many billionaires with a total net worth more than twice as large. Globally, 20% of the billionaire population in 2016 were primarily based in financial services, ahead of 14% in industrial conglomerates and 4.8% in technology.

5 - http://dogsofthedow.com/largest-companies-by-market-cap.htm

SIX OF THE 10 RICHEST PEOPLE IN THE WORLD HAVE MADE THEIR FORTUNES IN TECHNOLOGY AND THE FIVE LARGEST

TECH COMPANIES HAVE A COMBINED MARKET CAPITALISATION OF $2.5TRN – GREATER THAN THE TOTAL MARKET VALUE OF ALL CONSTITUENT COMPANIES IN THE UK’S FTSE100 INDEX.

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24 WEALTH-X BILLIONAIRE CENSUS 2017

THE NUMBER OF FEMALE BILLIONAIRES DECLINED FASTER THAN THE RATE OF MALE BILLIONAIRES IN 2016, REDUCING THE FEMALE

SHARE OF THE GLOBAL BILLIONAIRE POPULATION TO 11.3%.

GENDER

Source: Wealth-X

Female

Male

272

2,125

-7.5%

-2.5%

2016 Billionaire population2,397

-3.1%Change year on year

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25WEALTH-X BILLIONAIRE CENSUS 2017

The number of female billionaires declined faster than the rate of male billionaires in 2016, reducing the female share of the global billionaire population to 11.3%, down from 11.9% in 2015. The differences in wealth source by gender remain stark; whereas only 8% of all male billionaires inherited their wealth, 57% of female billionaires did so. The past 20 years of billionaire wealth creation have been driven largely by self-made individuals. Without a sizeable influx of new entrepreneurs, female billionaire representation is likely to continue to edge slightly lower – as a share of billionaire population and net worth – over the short term.

57%Inherited

27%Inherited/self-made

16%Self-made

WEALTH SOURCE BY GENDER 2016

8%Inherited

32%Inherited/self-made

60%Self-made

Source: Wealth-X

THE PAST 20 YEARS OF BILLIONAIRE WEALTH CREATION HAVE BEEN DRIVEN LARGELY BY SELF-MADE INDIVIDUALS.

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26 WEALTH-X BILLIONAIRE CENSUS 2017

WEALTH SOURCE OF ALL BILLIONAIRES 2016

2,397 Billionaires

318Inherited

755Inherited/self-made

1,324Self-made

-3.1%

-1.5%

-3.0%

-3.5%

Source: Wealth-X

Predominantly self-made billionaires experienced the largest drop in numbers in 2016, a reflection of the often greater short-term volatility in the value of their asset holdings (whereby a substantial share of wealth is often concentrated in a single company). Meanwhile, the number of billionaires who solely inherited their wealth declined at a slower pace than the other two groups in 2016. This group comprised a fairly modest 13% of all billionaires.

Change year on year

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27WEALTH-X BILLIONAIRE CENSUS 2017

BILLIONAIRE ARCHETYPES

Here we delve into the different characteristics of four selected billionaire groups: those who inherited their wealth, those based primarily in the tech industry, those who went to Harvard University (the most popular alma mater of the global billionaire population) and Chinese billionaires. While there is naturally some overlap between the four chosen groups, it is clear that each represents a very different type of billionaire in terms of age, gender, geography, wealth source and asset holdings.

ALL HARVARD TECH CHINA INHERITED-WEALTH ONLY

Number 2,397 125 115 249 318

Wealth ($bn) 7,400 590 600 670 1,050

Average wealth ($bn) 3.1 4.7 5.2 2.7 3.3

Average liquidity ($m) 775 1,100 875 300 800

Liquidity (% share) 25 23 17 11 25

Number of countries in which billionaires are primarily located

93 32 20 1 44

Top 3 countries (%) US (26) US (61) US (45) China (100) US (39)

China (10) Brazil (3) China (26) Germany (7)

Germany (5) Hong Kong (3) South Korea (5) Switzerland (5)

Male (%) 89 95 93 91 52

Female (%) 11 5 7 9 48

Average age 64 66 51 53 62

Proportion under 50 years of age (%)

14 12 51 33 18

Self-made (%) 55 64 92 94 0

Inherited/self-made (%) 32 26 7 4 0

Inherited (%) 13 10 1 2 100

Source: Wealth-X

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28 WEALTH-X BILLIONAIRE CENSUS 2017

Harvard is the world’s top university for producing billionaires, ahead of second-placed Stanford and third-placed University of Pennsylvania by a clear margin. Some 60% of today’s Harvard billionaires are still based primarily in the US but those who attended are spread across an additional 31 countries. Inherited wealth is more evident in this group than among the tech and Chinese billionaires – a pointer to Harvard’s exclusivity and privileged social network – but the university also has an above-average share of self-made billionaires. Almost all billionaire attendees are male and their average net worth of $4.7bn is substantially higher than the global mean. This can be put down to the fact that almost a quarter of the entire wealth of the Harvard billionaire group belongs to two of its most famous dropouts, Bill Gates and Mark Zuckerberg.

SOME 60% OF TODAY’S HARVARD BILLIONAIRES ARE STILL BASED PRIMARILY IN THE US BUT THOSE WHO ATTENDED ARE

SPREAD ACROSS AN ADDITIONAL 31 COUNTRIES.

HARVARD BILLIONAIRES: AN ELITE NETWORK

TECH BILLIONAIRES: YOUNGER AND WEALTHIER THAN AVERAGE

As already highlighted, the elevated average wealth of tech billionaires ($5.2bn) illustrates the extreme fortunes that can be made in the industry. Bill Gates now focuses primarily on not-for-profit initiatives through the Gates Foundation so is not included among this billionaire cohort. If he were to be counted, the average wealth of the group would rise to $5.7bn, almost twice the average net worth of the global billionaire population. Half of the 115 tech billionaires are below the age of 50, which compares with just 14% of all billionaires, underlining the transformative effect of the digital revolution. And tech wealth has now spread far beyond Silicon Valley and the San Francisco Bay Area in the US. China is now the primary base for 30 tech billionaires, with others located in a further 18 countries around the globe.

HALF OF THE 115 TECH BILLIONAIRES ARE BELOW THE AGE OF 50, WHICH COMPARES WITH JUST 14% OF ALL BILLIONAIRES.

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29WEALTH-X BILLIONAIRE CENSUS 2017

Chinese billionaires share many of the characteristics of their tech peers. Chinese billionaires are generally younger than the global mean, with one-third aged under 50, and are predominantly self-made (there are only a handful of inherited fortunes). However, in contrast to the tech group, the average wealth and liquidity of China’s billionaires are below the global average – $2.7bn and $300m respectively – indicating how relatively few are in a position to cash out of their primary business. China’s billionaire population has surged over the past five to 10 years, led by developments in the technology, consumer retail and real-estate sectors. Consequently, most are still in the wealth-creation rather than the wealth-preservation stage that is more common among multi-generational billionaires in Europe, the Americas and parts of the Middle East, who have higher liquidity and more diversified portfolios.

MOST CHINESE BILLIONAIRES ARE STILL IN THE WEALTH-CREATION RATHER THAN THE WEALTH-PRESERVATION STAGE.

CHINESE BILLIONAIRES: PREDOMINANTLY SELF-MADE

The number of billionaires who solely inherited their wealth has fallen slightly in recent years but the group is still considerably larger in size than both the Harvard and technology cohorts. In fact, there are more female inherited billionaires than the total number of either Harvard or tech billionaires. To a large extent, this reflects the significant proportion of women who have inherited their fortunes. In 2016, out of a total female billionaire population of 272, almost half had solely inherited their wealth while only 16% had made their own fortunes (compared with a 60% share of self-made men). That said, over recent years there is evidence to suggest that female billionaires are becoming less reliant on inherited money and are putting their capital at risk. This trend of inherited billionaires (of both genders) becoming more entrepreneurial is expected to continue. It is driven partly by the broader opportunities now open to second- or third-generation billionaires, compared with what was available to their parents, and the first major intergenerational wealth transfers occurring in emerging economies such as China. Over the coming years, this will drive growth in the hybrid inherited/self-made source of wealth.

INHERITED BILLIONAIRES: BECOMING MORE ENTREPRENEURIAL

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31WEALTH-X BILLIONAIRE CENSUS 201730 WEALTH-X BILLIONAIRE CENSUS 2017

La Scala

Opera House

(Year round)

Snow Polo World

Cup St. Moritz

World Economic

Forum Annual

Meeting, Davos

Paris Fashion

Week

Dubai

International

Boat Show

Dubai World Cup

(horse racing)

Sun Valley Film

Festival

Masters

Tournament (golf)

Concorso

d’Eleganza Villa

d’Este

Cannes Film

Festival

Formula 1 Monaco

Grand Prix

Cartier Queen’s

Cup (polo)

Paris Air Show

Jaeger-LeCoultre

Gold Cup (polo)

Royal Ascot

Bilderberg

Conference

Monaco Yacht

Show

Fort Lauderdale

International

Yacht Show

Frieze London

Art Fair

The

Championships,

Wimbledon

Les Azuriales

Opera

Burning Man

Art Basel

Miami Beach

New Year's Eve

on St. Barts

BILLIONAIRE CALENDAR

A selection of some of this year’s most popular events among billionaires.

(Some events belong to more than one category)

JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER

Source: Wealth-X

Yachts/aeroplanes/cars

Art/fashion/culture/music

Networking

Sport

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33WEALTH-X BILLIONAIRE CENSUS 2017

This report uses the unique and proprietary Wealth-X Ultra High Net Worth (UHNW) Database, the world’s most extensive collection of curated research and intelligence on UHNW individuals. Our database provides insights into their financial profile, career history, known associates, affiliations, family background, education, philanthropic endeavours, passions, hobbies, interests and much more. Our proprietary valuation model (as defined by net worth) assesses all asset holdings, including privately and publicly held businesses and investable assets. Wealth-X uses the primary business address as the determinant of a billionaire’s location. References to $ or dollars refer to US dollars.

Analysis of the data and additional insights were provided by Wealth-X Custom Research. The Custom Research (formerly Ledbury Research) department conducts primary and secondary research globally to give our clients in the wealth management, financial and luxury industries bespoke insight to fuel strategic decision making.

This report provides a selection of data and insights available from our UHNW Database and Custom Research team.

If you would like further information, please email [email protected].

METHODOLOGY

ABOUT WEALTH-X

Wealth-X is the leading global wealth information and insight business, partnering with prestige brands across the financial services, luxury, not-for-profit and higher education industries. We have developed the largest collection of hand-curated dossiers on UHNW individuals available anywhere in the world today, as well as the world’s foremost HNW market research team.

At Wealth-X, we believe in the power of applied wealth intelligence to drive success for our clients. Our proprietary data assets and specialised research capabilities help our clients understand and engage their target audience, minimise their risk and make informed strategic decisions.

Founded in 2010, the Wealth-X team has grown to over 200 staff across North America, Europe and Asia, working with more than 500 clients.

Our team of experts is widely quoted as the global authority on wealth intelligence by top-tier media organisations, such as The Wall Street Journal, Financial Times, Business Insider, CNN, The New York Times and the BBC.

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