Middle East and Africa attracted most billionaire wealth globally since Covid-19, study shows

UAE billionaires’ wealth rose by 39.5 per cent annually to $138.7 billion this year, UBS report finds

Billionaires' combined wealth globally has more than doubled to $14 trillion from $6.3 trillion in 2015. Getty Images

The Middle East and Africa region has attracted the most billionaire wealth globally since Covid-19 as the uber rich move to countries that offer premium health care, education, safety and ease of doing business, according to a new report by Swiss banking group UBS.

UAE billionaires’ aggregate wealth rose by 39.5 per cent annually to $138.7 billion this year, with the number of billionaires growing by one to 18, UBS’s Billionaire Ambitions report found.

Since 2020, billionaires globally have been relocating more frequently, with 176 having moved to countries out of a total population of 2,682. Billionaires accounting for more than $400 billion in wealth have emigrated in four years, the report showed.

“The shock of the pandemic put a premium on first-class health care, while young families increasingly value excellent education and a safe environment,” said Benjamin Cavalli, head of strategic clients at UBS Global Wealth Management.

“As most billionaires are businesspeople, they also prize the ease of doing business, especially considering heightened geopolitical risk. They may also want to live in jurisdictions where legal structures support wealth transfer.”

The world’s affluent people are relocating and restructuring their financial assets amid political instability, widespread economic uncertainty and military conflicts.

The UAE has established itself as the leading destination for high-net worth individuals globally this year, attracting more than 6,700 millionaires, according to British investment migration consultancy Henley & Partners.

The country’s tax-free environment, quality of life and robust financial infrastructure are significant draws.

Since 2015, the number of billionaires globally has risen by more than half to 2,682 from 1,757 and their combined wealth has more than doubled to $14 trillion from $6.3 trillion. However, this increase in wealth has levelled off since 2020 amid consolidation among China’s billionaires, according to the UBS report.

“From 2015 to 2020, billionaire wealth grew globally at an annual rate of 10 per cent. Since 2020, the global average has stalled at 1 per cent. But that number masks continued expansion in the US, Europe, Middle East and Africa, and parts of Asia, most notably India,” the study said.

“India was a bright spot in the Asia-Pacific region. The country’s billionaires now have the third-highest total wealth of any country, behind the US and China. The number of Indian billionaires has more than doubled (123 per cent) to 185 in the 10 years to April. Their total wealth has almost tripled (263 per cent) to $905.6 billion.”

The number of female billionaires has grown by 81 per cent to 344 from 190 in the last decade, mainly driven by the self-made. This compares with a 49 per cent rise in the number of male billionaires, which remains far larger at 2,338.

From a wealth perspective, female billionaires’ assets have grown by 153 per cent to $1.7 trillion compared to a 117 per cent rise in male billionaires’ assets to $12.3 trillion. The average wealth of male billionaires has risen 45 per cent to $5.3 billion, while that of female billionaires is up 40 per cent to $4.8 billion, according to UBS data.

The wealth of tech billionaires has grown the fastest over 10 years. Tech billionaires’ wealth tripled to $2.4 trillion from $789 billion. Meanwhile, industrial billionaires increased their wealth by the second-largest amount – to $1.3 trillion from $480 billion.

Materials sector billionaires registered the third-strongest performance, rising to $1.8 trillion from $718.1 billion. Real estate billionaires’ total wealth increased to $692.3 billion from $534 billion, perhaps due to a combination of China’s property correction, the Covid-19-induced upheaval in parts of commercial real estate and higher US and European interest rates from 2022, the report explained.

Wealth is becoming more concentrated as the top 100 wealthiest billionaires accounted for 36 per cent of all billionaire wealth this year compared to 32.4 per cent in 2015.

North America hosts the greatest percentage of the top 100 – 43 per cent live there, 21 per cent live in Western Europe, followed by 15 per cent in South-East Asia (including India) and 8 per cent in China, according to UBS.

“Nearly half of the top 100 wealthiest billionaires are in the more populous consumer and retail and materials sectors, each accounting for 24 per cent. This is followed by the technology sector and financial services sector, which each account for 16 per cent,” the report said.

It added that billionaires aged 70 or older will transfer $6.3 trillion over the next 15 years, mainly to their families but also to chosen philanthropic causes.

Billionaires chose geopolitical conflict to pose the biggest risk to their investment portfolios over the next 12 months, according to a UBS poll of 82 billionaires this year. Other risks cited include higher inflation, a global recession, higher taxes, debt crisis, financial market crisis and technological disruptions, the poll found.

Over the next year, 43 per cent of billionaires globally intend to increase their exposure to real estate and 42 per cent to developed market equities, while 40 per cent plan to increase gold and precious metals exposure and 31 per cent to cash, the poll revealed.