Wealth of world’s billionaires dropped by $388 billion in 2018 when it decreased to $8.5 trillion across industries, except technology, an annual UBS and PwC billionaire report, The Billionaire Effect, obtained by Nairametrics disclosed.
The report, which was released on Friday, disclosed that this is the first time the billionaires’ wealth would suffer a setback after five years growth.
Highlights of the report
- Over the 15 years to the end of 2018, billionaire-controlled companies listed on the equity market returned 17.8%, compared with the 9.1% 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, led by prominent US tech billionaires.
- 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% in five years.
- Asia’s billionaires benefited from the five years significant growth as their wealth almost quadrupled.
- Despite slow growth last year, billionaire wealth is over a third higher (34.5%) than five years earlier, amounting to an increase of $ 2.2 trillion.
- The number of female billionaires has grown by 46% in five years – ahead of the growth rate of male billionaires in the same period (39%). There are now 233 female billionaires, up from 160 in 2013.
- In Asia, over half (57%) 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.
What really happened
Head, Ultra High Net Worth, UBS Global Wealth Management, Josef Stadler, stated, “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.”
However, the billionaires across the globe came up with initiatives that drive a difference.
- 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.
- 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.
Partner and Swiss Head Wealth Management, PwC Switzerland, Marcel Tschanz, said, explained that the EU action plan for Sustainable Finance, UN Sustainable Development Goals (SDGs) have shown the world how individuals and institutions are expected to foster sustainability.
According to him, the 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.
Tschanz said, “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.”
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.