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UBS sees a “coming era of wealth inheritance” as more than 1,000 billionaires will inherit an estimated $5.2 trillion to their children over the next 20 to 30 years.
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billionaire For the first time since founding, those founded in recent years accumulated more wealth through inheritance than through entrepreneurship. UBS I started chasing my destiny Almost ten years ago, they were among the richest people in the world.
Billionaire heirs are also more likely than their parents to invest in areas such as clean energy and artificial intelligence and focus on key opportunities and challenges facing the global economy, the Swiss financier said. it said in a report Thursday.
“As many billionaire entrepreneurs age, huge wealth transfers are gaining significant momentum,” said Benjamin Cavalli, who oversees strategic clients. UBS Global Wealth Management told reporters.
“With more than 1,000 billionaires gifting an estimated $5.2 trillion to their children, this is a topic that is expected to gain even more attention over the next 20 years.”
UBS (UBS(which counts half of the world’s billionaires as clients) found that $150.8 billion was inherited by 53 heirs in the 12 months ending in April, and 84 new heirs were inherited during this period. That’s more than the $140.7 billion accumulated by self-made billionaires.
Overall, the number of billionaires in the world increased by 7% to 2,544. Their total wealth, before accounting for inflation, rose 9% to $12 trillion.
the total That remains below the $13.4 trillion peak it reached in 2021, when the global billionaire community grew to 2,686 people as assets such as stocks and real estate rose following the pandemic.
The report’s findings also reflect the depressed state of the IPO market from 2022 to early 2023, limiting opportunities for entrepreneurs to take their businesses public and increase their wealth.
“Economic, geopolitical and policy uncertainties pose challenges to entrepreneurial wealth creation these days,” said Max Kunkel, chief investment officer for family and institutional wealth management clients at UBS. he said.
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Bernard Arnault of LVMH with his wife Hélène and four of their five children (from left: Frédéric, Delphine, Antoine and Alexandre) in Paris. All five of his children work at the company.
Europe leads the rise in billionaire wealth for the first time as a ‘post-pandemic splurge’ boosts profits and stock prices of major France-based luxury goods companies, benefiting the billionaire families behind them The report said.
For that, LVMH Chairman Bernard Arnault and his five children. With a net worth of $167 billion, Arnault is the third richest person in the world, according to the Bloomberg Billionaires Index.Arnaud’s wealth eclipsed by the sun Tesla’s Elon Musk and Amazon’s Jeff Bezos took first and second place, respectively, late last year.
While technology and healthcare billionaires have amassed the greatest wealth over the past decade, the report highlighted that: ‘Early signs of improving fortunes’ for industrial billionaires, including India’s billionaires Gautama Adanibehind the multinational conglomerate Adani Group. Mukesh Ambani Reliance Industries.
“This situation is likely to persist amid government incentives in several countries to accelerate the energy transition and increase defense spending,” the report said.
UBS risks and opportunities
Cavalli said the “staggering” transfer of wealth to younger generations represents a huge opportunity for UBS, but it also poses considerable risks.
“You can be either the winner or the recipient of it, but if you don’t know the potential beneficiaries, you could lose significant assets down the road,” he said.
Young clients are usually Noting that many heirs are over 50 themselves, Cavalli said he prefers to bring in bankers different from their parents, although they don’t necessarily have to be younger bankers.
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After bailing out rival Credit Suisse in March, UBS is now the world’s second-largest asset manager after Morgan Stanley, with about $5.4 trillion in assets under management.
The changing of the guard may also affect philanthropy, with less than two-thirds of the heir generation considering philanthropy as one of their main purposes, according to the UBS report. Only two-thirds of first-generation billionaires do.
The heirs are leaning toward impact investing, or investments that are socially or environmentally beneficial. “Classic grant-giving philanthropy,” Cavalli said. “Patriarchs of the past were well known for writing checks for causes to which they had a personal affinity and passion.”
Billionaire investor Charlie Munger died At age 99, Tuesday was known for his philanthropy. For example, in October he donated Berkshire Hathaway stock worth $40 million at the time to the Henry E. Huntington Library and Museum, according to one source. Regulatory filing.