Brazil — The Future of HNWIs to 2016 Feature Article

Brazil — The Future of HNWIs to 2016 Feature Article

 HNWIs in Brazil have registered strong growth since the global economic crisis

  • Brazil has the highest number of HNWIs in Latin America and the third highest among the BRIC nations. As of 2011, there are just over 194,000 HNWIs in Brazil,, accounting for roughly 29% of Brazil’s total wealth.
  • The total number of HNWIs in Brazil increased by 31% during the review period (2007–2011), while the HNWI wealth rose by 39%.
  • The wealth of HNWIs in Brazil was positively influenced by a strong local property market and a significant appreciation of the Brazilian real against the US dollar over the review period.
  • Growth in HNWI wealth and volumes will continue to be robust over the forecast period (2012–2016) as more new businesses are developed within the country.
  • Over the forecast period, the total wealth of Brazil’s HNWIs is forecast to grow by 46%, while the total volume of HNWIs in the country is expect3ed to increase by 40% to reach just over 272,000 individuals in 2016.

 Asset allocation of HNWI investments

  • In 2011, real estate was the largest asset class for HNWIs in Brazil, representing 37.4% of the total HNWI assets. This was followed by equities accounting for 18.4%, cash comprising 13.5%, business interests constituting 12.7%, fixed income representing 12.4% and alternatives amounting to 5.6%.

The geographic distribution of HNWI investments

  • In 2011, HNWIs in Brazil held 22.1% (US$210 billion) of their wealth outside of Brazil. This is below the global average of approximately 30%.

 UHNWIs – demographic and sector trends

  • As one might expect, manufacturing is the most important industry from which Brazil’s UHNWIs have acquired their wealth and is the primary source of wealth for 12.4% of UHNWIs. Basic materials (which includes agriculture and mining), in second place, is the primary source of wealth for 10.9% of Brazil’s UHNWIs. Other important industries for UHNWIs include diversified, which accounted for 10.6%; transport and logistics, which comprised 10.2%; and construction and engineering, which constituted 9.9%.

UHNWIs – regional trends

  • Sao Paulo is home to the largest portion of Brazil’s UHNWIs, accounting for 32% of the country’s total UHNWI population. There are also sizable Brazilian UHNWI populations in Rio de Janeiro, Belo Horizonte and Brasilia.

 Private Banking – well developed wealth management market

  • The global private banking industry is estimated to have assets under management (AuM) of just over US$16.5 trillion. The Brazilian wealth management sector accounts for US$250 billion of this, making it the largest Latin America country by AuM.

 

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