A massive transfer of wealth is gaining speed, as billionaires are increasingly padding their vast fortunes with inheritance rather than entrepreneurship, a study by Swiss banking giant UBS Group AG showed yesterday.
Over recent decades, the number of billionaires has ballooned, with surging entrepreneurial activity within tech and other areas ushering fresh members into the super-wealthy club.
However, in its ninth annual report on the world’s billionaires, UBS noted a significant shift in the way such fortunes are being made and expanded.
Photo: Reuters
“The heirs to billionaires are gaining prominence,” UBS Global Wealth Management head of strategic clients Benjamin Cavalli said in the foreword to the report.
“This year’s report found that the majority of billionaires that accumulated wealth last year did so through inheritance as opposed to entrepreneurship,” he said in a statement.
“This is a theme we expect to see more of over the next 20 years, as more than 1,000 billionaires pass an estimated US$5.2 trillion to their children,” he said.
That forecast was based on the estimated accumulated wealth of today’s billionaires who are over the age of 70, UBS said.
“After the surge in entrepreneurial activity witnessed over the past few decades, many business founders are now aging and passing their wealth to the next generation,” the study said.
The study showed 2,544 billionaires in the world by April this year, with their ranks swelling by 7 percent in the preceding year.
After seeing their combined fortunes shrink the previous year, billionaire wealth grew by 9 percent from April last year to April this year to US$12 trillion, it found.
The new billionaires included 53 heirs, whose accumulated inheritance amounted to US$150.8 billion, exceeding the US$140.7 billion joint fortunes of the 84 new self-made billionaires on the list, it said.
UBS attributed this shift in part to a subdued market for initial public offerings through last year and into this year, limiting the opportunities for entrepreneurs to monetize the values of their businesses.
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