Billionaires increased in numbers and overall wealth last year, Swiss bank UBS (UBSG.S) said on Thursday, with the fortunes inherited by the newly-minted super-rich exceeding cash generated by self-made billionaires for the first time in years. The number of billionaires rose 7% to 2,544 people globally, while their total worth rose 9% to an estimated $12 trillion.
The heirs of baby boomers and older individuals built their wealth after the financial crisis, boosted by low-interest rates that disproportionately helped them and high levels of merger activity, entrepreneurship, and initial public offerings. But as they near retirement, many are now passing their fortunes on to the next generation.
Inheritances of new billionaires jumped by almost a third to $158 billion in the past 12 months, eclipsing the $84 billion in cash generated by the 84 new self-made billionaires, UBS said. The trend reflects the growing importance of wealth transfers in wealthy economies. Increasing life expectancy, declining marriage and divorce rates, and shifting from labor to capital markets are driving a generational transfer of wealth that will likely accelerate as the baby boomers reach retirement age.
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For the first time in UBS’s billionaires survey history, most respondents reported that they intended to pass on their wealth to their children and grandchildren. Inheritances accounted for nearly half of the growth in global billionaire wealth over the past year, while other forms of wealth creation — such as business expansion and real estate investments — slowed.
According to UBS, billionaires’ appetite for investing in technology was strong, but they were also concerned about rising inflation and political and geopolitical risks. Many also needed to be more concerned about the impact of a slowdown in China on their global businesses.
The report was based on interviews with over 400 billionaire clients worldwide by UBS’s Private Bank and Investment Management division, which handles the assets of about half of the world’s billionaires. The bank surveyed its clients in Switzerland, Europe outside of Switzerland, Singapore, Hong Kong, and the United States between 29 June and 5 September 2022.
The global economy grew fastest in more than four years last quarter, but that has not translated into more robust economic gains for billionaires. The number of billionaires fell in China and India, while wealth declined significantly in Japan, the United States, Canada, Australia, and Germany. A subdued rate of company flotations through 2022 and early 2023 also limited the opportunity for entrepreneurs to increase their wealth through listing.
