Category Archives: HNWIs

Fiscal cliff threatens number of US millionaires

The number of millionaires in the US could drop by as much 6% in 2013, and HNWI wealth by about $240 billion, if the so called ‘fiscal cliff’ is not averted.  WealthInsight has prepared 4 scenarios, detailing the likely impact of the US fiscal policy standoff on the US HNWI population.

cliff scenarios

 Key findings:

 The total number of US millionaires (high net worth individuals, “HNWIs”)is forecast to grow by 4.3% in 2013.

  • But if GDP growth were to drop to 0% in 2013, as the IMF predicts if the fiscal cliff isn’t averted, HNWI volumes would decline by 5.9% – a swing of over 10%.
  • Even if the fiscal cliff is avoided, or is short-lived, “tiptoeing around the cliff-edge” has the potential to undermine economic growth and impact the US HNWI population in 2013:

–        If the US were to “fall off the cliff” and GDP growth flatlines, the number of HNWIs would fall by 315,000 in 2013; HNWI wealth would fall by about $240 billion.

–        In our ‘retrenchment’ scenario, a slowdown in annual GDP growth (to 1% in 2013) leads to a decline in the number of US HNWIs of 26,000; HNWI wealth would fall under this scenario by only $40 billion.

–        In our ‘steady’ scenario, GDP growth continues as forecast (2.1% for 2013) and the number of millionaires increases by about 230,000 compared with 2012; HNWI wealth in 2013 increases by just over $1 trillion.

–        If the threat of the fiscal cliff didn’t exist at all, we project that the US HNWI population would be set to swell by 443,000 individuals next year and HNWI wealth would increase by more than $1.6 trillion.

  • Uncertainty created by the fiscal policy standoff is shaping wealth managers’ asset allocation strategies.
  • Fixed income products recorded the strongest growth between 2007 and 2011, driven by a movement to safer asset classes. Looking ahead to 2016, alternatives are expected to be the top-performing asset class for HNWIs.
  • As of 2011 there are just over 5.1 million millionaires (HNWIs) in the United States, only 165,360 fewer than in 2007, despite the financial crisis.
  • From the end of 2008 to the end of 2011, the US has added more than 1.1 million HNWIs, an increase of 28.6%, as the HNW population rebounded from the financial crisis.

According to WealthInsight analyst, Christopher Rocks: “With signs that growth in the US economy is decelerating, HNWIs will be worried about the economic uncertainty being created by the so called ‘fiscal cliff’. At the moment there is intense speculation among wealth managers over what exact course US fiscal policy will take in the short-term, which could have significant repercussions for America’s wealthy population.”

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Germany’s rich: Top 25 Cities for German multi-millionaires

According to WealthInsight research, there are 11,392 multi-millionaires in Germany (each with assets of over US$30 million), the third highest number in the world, behind only the US and Japan.

Frankfurt is home to the largest portion of these with 1,868 multi-millionaires. Compared to major EU cities: this is above Paris (1,500 multi-millionaires), Zurich (1,314) and Geneva (1,156), but well below London (4,220). There are also sizable German multi-millionaire populations in Munich (1,113), Hamburg (843), Düsseldorf (524), Berlin (464) and Stuttgart (382).

According to WealthInsight analyst Andrew Amoils: “Germany has a relatively even spread of multi-millionaires with 10 German cities with more than 150 multi-millionaires and 5 German cities with more than 400 multi-millionaires. This differs considerably from other major EU countries (UK and France) where wealth is centered around the capital cities”

“However, one should note that the top 25 German cities for multi-millionaires are all based in former West Germany.”

“Leipzig is the top East German city, it has only 28 multi-millionaires.”

 

Additional findings:

  • The number of multi-millionaires in Germany increased by 0.7% over the four year period between 2007 and 2011 (review period).
  • Munich and Essen were the top performing German cities for multi-millionaires over the period, with growth of 30% and 23%, respectively.
  • The number of multi-millionaires in Berlin and Stuttgart declined by the largest amounts over the review period: 16.5% and 13.2%, respectively.
  • Multi-millionaires in Frankfurt also fared relatively poorly, with their number declining by 6.2% over the review period.

 

Ranked by number of UHNWIs in 2011

 

Number of UHNWIs, 2011

% of UHNWIs, 2011

1

Frankfurt

1,868

16.4%

2

Munich

1,113

9.8%

3

Hamburg

843

7.4%

4

Düsseldorf

524

4.6%

5

Berlin

464

4.1%

6

Stuttgart

382

3.4%

7

Cologne

235

2.1%

8

Hanover

216

1.9%

9

Essen

213

1.9%

10

Bonn

154

1.4%

City with rank

Number of UHNWIs

Population

UHNWI population density

11. Bremen

129

547,340

24%

12. Ludwigshafen

97

164,351

59%

13. Duisburg

91

489,559

19%

14. Gütersloh

91

96,404

94%

15. Nuremberg

78

505,664

15%

16. Mainz

69

199,237

35%

17. Kiel

66

239,526

28%

18. Wolfsburg

64

121,451

53%

19. Bielefeld

55

323,270

17%

20. Karlsruhe

53

294,761

18%

21. Oberursel

52

43,741

119%

22. Walldorf

50

14,824

337%

23. Mulheim

47

167,344

28%

24. Osnabrück

45

164,119

27%

25. Wiesbaden

44

275,976

16%

26. Darmstadt

42

144,402

29%

27. Dortmund

42

580,444

7%

28. Augsburg

41

264,708

15%

29. Bad Homburg

40

52,229

77%

Definitions:

  • “Multi-millionaires” otherwise known as “ultra high net worth individuals” or “UHNWIs” are individuals with net assets of US$30 million or more excluding their primary residences.
  • “Millionaires” otherwise known as “high net worth individuals” or “HNWIs” refer to individuals with net assets of US$1 million or more excluding their primary residences.
  • For the purposes of this report, the phrase “review period” relates to the years 2007–2011 and the “forecast period” relates to the years 2011–2016.

India’s super rich: Top 8 Cities for Indian multi-millionaires

 

According to WealthInsight research, there are 1,576 multi-millionaires in India (each with net assets of over US$30 million). Mumbai is home to 37% of these or 577 multi-millionaires.

According to WealthInsight analyst Shekhar Tripathi: The number of multi-millionaires in India increased by 46% over the four year period between 2007 and 2011.”

Dehli has the 2nd highest number of Indian multi-millionaires (147 multi-millionaires) followed by Kolkata (126 multi-millionaires), Hyderabad (114 multi-millionaires) and then Bangalore (97 multi-millionaires).

The number of multi-millionaires in Pune, Maharashtra’s second city after Mumbai, grew by the largest margin (68%) over the period between 2007 and 2011. The number of multi-millionaires in Mumbai also grew by strongly over the period, by 59%.

According to WealthInsight analyst Sunil Agarwal: “Pune’s rise was aided by its proximity to Mumbai and by robust growth in the local automotive, manufacturing and technology sectors”

 

Major Cities

Number of multi-millionaires, 2011

Mumbai

577

Delhi & New Delhi

147

Kolkata

126

Hyderabad

114

Bangalore

97

Chennai

88

Pune

55

Ahmedabad

51

Other

321

India

1,576

Super rich: Top 16 Cities for Chinese multi-millionaires

According to WealthInsight research, there are 7,905 multi-millionaires in China (each with net assets of over US$30 million). Unsurprisingly, Beijing and Shanghai are the top two cities with 1,318 and 1,028 multi-millionaires respectively.

 

Hangzhou has the 3rd highest number of Chinese multi-millionaires (563 multi-millionaires) followed by Shenzhen (377 multi-millionaires), Guangzhou (311 multi-millionaires), Nanjing (192 multi-millionaires) and then Tianjin (155 multi-millionaires).

 

Over the four year review period, the number of multi-millionaires in China increased by 41% from 5,590 individuals in 2007 to 7,905 in 2011. Chongqing was the top performing city with multi-millionaire numbers rising by 78% in the city from 54 individuals in 2007 to 96 in 2011. Chengdu was the 2nd best performing city, with multi-millionaire volume growth of 61%.

 

According to WealthInsight analyst Christopher Rocks: “Chongqing multi-millionaire numbers were boosted by strong growth in the local manufacturing, real estate and transportation sectors”