CC-BY-SA-2.0, FlickrPhoto: Pexels. The UHNWI, the 0.004% of the World’s Adult Population that Control 12% of the World's Wealth
According to the World Ultra Wealth Report 2015-2016 produced by Wealth-X, there are 212,615 ultra high net worth (UHNW) individuals globally, holding a combined wealth of US$30 trillion in net assets.
The fourth edition of this leading report on the world’s ultra wealthy population shows almost flat growth in 2015 as the number of individuals with US$30 million or more in net assets grew just 0.6% and total UHNW wealth increased by 0.8%. Despite this meager growth, UHNW individuals, who account for just 0.004% of the world’s adult population, still control 12% of its wealth.
Regional Differences in UHNW Growth Trends
In Europe, the Middle East and Africa UHNW wealth fell 2.4% as equity markets, local currencies and gross domestic product collectively experienced negative net returns. By contrast, Asia-Pacific experienced a 3.9% rise as the ultra wealthy in certain markets continued to benefit from dynamic business expansion and economic growth. In the Americas, it was Latin America, rather than North America, that helped the region achieve a modest 1.5% growth in ultra wealth value.
Across all geographic regions, it is the highest ranks of the UHNW population who are experiencing the most success. The report highlights that in 2015 billionaires saw their wealth grow 5.4%, more than double the rate of global economic growth, while collectively other tiers saw their wealth shrink by 0.6%.
Driven by Wealth-X’s unparalleled collection of hand curated dossiers on the global UHNW population, the World Ultra Wealth Report contains detailed analysis of the wealthiest individuals in the world with a focus on geography, lifestyle, social networks, philanthropic behaviors, motivations and legacy.
Additional key findings from the report include:
UHNW global wealth is expected to reach US$46.2 trillion by 2020
UHNW wealth is expected to grow at a compound annual growth rate of 9%.
The UHNW population is expected to exceed 318,000 by 2020.
Female UHNW individuals saw their wealth decrease
While the female UHNW population remained steady at 13%, their share of total UHNW wealth fell from 14% to 11% this year. Average female high net worth wealth dropped from US$147 million to US$126.3 million.
Male wealth increased 2.4% from US$139.8 million to US$143.1 million, reflecting a greater focus on self-made wealth and a higher-risk asset composition.
Finance, banking and investment remains the top UHNW industry
Though its lead among other UHNW industries continues to shrink as manufacturing grows in importance.
In two out of three cases, wealth is purely self-made rather than inherited. As wealth matures in younger economies, the transfer of wealth has seen a growing class of second-generation ultra wealthy emerge.
Wealth continues to rise generation by generation
The under-30 demographic accounts for just 1% of the world’s ultra wealthy population and 0.3% of global UHNW wealth.
UHNW individuals aged 80 or over are seven times wealthier than those under 30 and are worth nearly double that of the average UHNW individual globally.
The BofA Merrill Lynch October Fund Manager Survey shows global investor risk-aversion is growing as cash allocations increase to near-15-year highs. “This month’s cash levels indicate that investors are bearish, with fears of an EU breakup, a bond crash and Republicans winning the White House jangling nerves,” said Michael Hartnett, chief investment strategist at BofA.
Manish Kabra, European equity quantitative strategist, added that, “Although investors see an EU-disintegration as a big tail risk, European fund managers surveyed are more optimistic about the economic growth outlook for the Eurozone and expect stronger inflation.”
Other highlights include:
Cash levels jumped from 5.5% in September to 5.8% this month. Investors’ average cash balance was last this high in July 2016 (post-Brexit vote) and in Fall 2001.
Investors identify fears of an EU breakup, a bond crash and a Republican winning the White House as the most commonly-cited tail risks.
With inflation expectations at a 16-month high and perceptions of developed market equity and bond valuations at record highs, investors are no longer underweight in commodities for the first time since December 2012.
Rotation out of healthcare/pharma, REITs and bonds, into banks, insurance, equities, commodities and EM.
Investors cite Long high-quality stocks, Long US/EU IG corporate bonds and minimum volatility strategies as the most crowded trades.
Allocation to EM equities rises to the highest overweight in 3.5 years, from 24% last month to 31% in October.
Allocation to U.S. and Eurozone equities is unchanged from last month, while allocation to UK equities falls to net 27% underweight from net 24%.
Allocation to Japanese equities improves modestly to net 3% underweight from net 8% underweight last month.
Eric Figueroa - Courtesy photo. Eric Figueroa Joins MFS as Director, Responsible for Sales in Southeastern US, Caribbean and Central America
MFS Investment Management has announced the hiring of Eric M. Figueroa, CIMA, as an associate director and wholesaler for MFS International Ltd. (MIL). Based in Miami, Florida, he will be responsible for the sale of MFS Meridian Funds, working with advisors across all channels, including family offices, independents, banks and wirehouse firms. His coverage area includes the southeastern United States, the Caribbean and Central America.
“Eric brings tremendous experience to this role, having worked previously as a private banker in the region. He understands the role the financial advisor plays in helping clients achieve their long-term goals and the value an investment manager must bring to the equation,” said L. Jose Corena, managing director – Americas for MFS. “His depth of perspective as a former client in the sales process will be invaluable as we continue to grow our presence across these key regions.”
Figueroa will report to Corena. He will work closely with members of MFS’ sales and client service teams, partnering and coordinating sales coverage and support for the southeastern United States, Caribbean and Central American regions with senior team member Paul Brito, CIMA, regional director, and Natalia Rodriguez, senior internal sales representative.
Figueroa joins MFS from Itau International Securities, where he worked as a financial advisor in private banking for three years. He previously worked for HSBC for ten years, most recently as a financial advisor. He began his career in financial services with HSBC in 2003. He earned a bachelor’s degree in international finance and marketing from the University of Miami and attended the executive education program at the Wharton School at the University of Pennsylvania. Figueroa holds the Certified Investment Management Analyst (CIMA) designation from the Investment Management Consultants Association. He also holds the Financial Industry Regulatory Authority (FINRA) Series 6, 7, 63 and 65 and the Florida Life Health Variable Annuity licenses.
Martin Hofstadter - courtesy photo. Martin Hofstadter Has Joined Lord Abbett as Director, Offshore Business Development,The Americas
Martin Hofstadter will join Lord Abbett’s International team as Director, Offshore Business Development – The Americas. In his new role, he will be based in Miami and will work with Nicolette Iorio, Associate, International Investor Services and report to Andrew D. D’Souza, Partner, International Investor Services at Lord Abbett.
Hofstadter will be responsible for the firm’s efforts to maintain and expand its offshore business in the Americas, including the NRC market and Latin America with a focus on wirehouses, private banks and independent advisors. “Martin brings a tremendous amount of proven experience to the team,” said D’Souza. “His insights and knowledge will be invaluable as we work together to expand our presence in the international market.”
Before joining Lord Abbett, Hofstadter worked at Man Group for 14 years as Managing Director and Principal with responsibility for offshore distribution in the U.S. and LatAm. He has a BA in finance from ROU and is a CFA charterholder.
Photo: visitmonaco.com. HSBC clients in Monaco to join CFM Indosuez Wealth Management
CFM Indosuez Wealth Management, which represents the Indosuez Wealth Management network in Monaco, has announced an agreement with HSBC Private Bank to welcome clients from HSBC’s client base in the Principality of Monaco.
The firm said this agreement is in line with Indosuez Wealth Management Group’s strategy to bolster its positions with ultra-high-net-worth-individuals clients in its key markets.
The deal also strengthens CFM Indosuez Wealth Management’s leadership as the largest bank in Monaco.
“The referral process will begin immediately. CFM Indosuez Wealth Management will work closely with HSBC to ensure the smoothest possible process for the clients,” the company commented.
Indosuez Wealth Management had €110bn of assets under management at the end of 2015.
Foto: waferboard
. GAM completa la adquisición de Cantab Capital Partners y lanza dos nuevas estrategias cuantitativas bajo el nombre GAM Systematic
GAM has completed the acquisition of Cantab Capital Partners, which was first announced on 29 June 2016. Cantab, a multi-strategy systematicmanager based in Cambridge, UK, manages USD 4.1 billion in assets for institutional clients worldwide (as at 1 October 2016). It’s technology and its team of over 30 scientists, led by Dr Ewan Kirk, form the cornerstone of GAM Systematic. This new investment platform is co-headed by Adam Glinsman, CEO of Cantab, and Anthony Lawler, Head of Portfolio Management at GAM’s Alternative Investments Solutions (AIS) group.
Two new UCITS funds are to be launched, subject to regulatory approval, that will offer daily liquidity and will be available under the GAM Systematic name. Both funds will be designed to deliver attractive risk-adjusted returns as well as offering diversification to equity and bond investments over the cycle. The new funds will also be structured to be cost-effective.
The systematic global equity market neutral strategy will contain Cantab’s established equity-focused models, which have delivered a successful return track record as part of Cantab’s flagship Quantitative Fund launched in 2007. It will invest in liquid equities globally using proprietary research and trading systems, without taking equity market beta. Over a three-year cycle, the strategy will aim to deliver attractive returns with annual volatility of 6-8%.
The systematic diversified macro strategy will be a multi-strategy, multi-asset product based on Cantab’s established Core Macro fund, which launched in 2013. It will seek to generate returns uncorrelated to traditional asset classes by identifying persistent and recurring sources of return across over 100 markets in currencies, fixed income, equity indices and commodities. Over the cycle, it is expected to deliver attractive returns with negligible correlation to traditional markets and annualised volatility of 10-12%.
The latest European ETF Market Review from Thomson Reuters Lipper shows that negative market impacts led—in spite of net inflows—to lower assets under management in the European ETF industry in September (€480.1 bn for September, down from €480.4 bn at the end of August).
According to Detlef Glow, Head of EMEA research at Thomson Reuters Lipper and author of the report, the decrease of €0.3 bn for September was mainly driven by negative market impacts (-€2.4 bn), while net sales contributed a positive €2.1 bn to the assets under management in the ETF segment.
Other highlights include:
Bond ETFs (+€1.3 bn) posted the highest net inflows for September.
The best selling Lipper global classification for September was Bond Emerging Markets Global in Local Currencies (+€0.8 bn), followed by Equity Emerging Markets Global (+€0.5 bn) and Equity Global (+€0.5 bn).
iShares, with net sales of €1.0 bn, maintained its position as the best selling ETF promoter in Europe, followed by Vanguard (+€0.8 bn) and UBS ETF (+€0.4 bn).
The ten best selling funds gathered total net inflows of €3.1 bn for September.
Vanguard S&P 500 UCITS ETF USD (+ €0.7 bn), was the best selling individual ETF for September.
Photo: Pixabay. PwC Launches an Education Platform Addressing the Barriers to Financial Investing
European citizens are required, more than ever, to invest their savings on the capital markets to save for their future pension, while contributing to the financing of the European economy. At the same time, financial products and financial regulation are increasingly complex while investor education remain a challenge. In this context, PwC has just launched Buzz4Funds, an education platform dedicated to raising public understanding of financial investing, including through investment funds.
The primary goal for this programme, currently made up of a series of ten videos and a website, is to arm millennial investors with the unbiased and non-commercial information they need to make investing decisions.
“Investor education is complementary to the traditional tools of investment product information, financial reports and other required communications,” says Steven Libby, partner and Asset & Wealth Management Leader at PwC Luxembourg.
The Investor Education video series covers topics ranging from understanding the difference between saving and investing to the red flags of investment to selling.
“These funny videos aim to grab the attention of potential of future investors, triggering their curiosity to visit the dedicated website where they will discover explanations and links to additional material,” explains Nathalie Dogniez, partner at PwC Luxembourg
To watch the videos and discover the related messages, you can visit the Buzz4Funds website.
Foto: Bradley Davis. Lennar cierrra el Lennar Multifamily Venture en 2.200 millones de dólares
Lennar Corporation has announced that LMC, its wholly owned subsidiary, received an additional $250 million commitment to its Lennar Multifamily Venture (“LMV“), which completes the fund raising for this long term multifamily development investment vehicle. With commitments totaling $2.2 billion, the Miami based company LMV is well capitalized to develop and ownClass A multifamily communities in 25 target markets throughout the United States.
Lennar launched LMC in 2011, and since that time the company has been among the nation’s most active developers. LMC currently has approximately 13,300 apartment homes in 45 communities operating or under construction and including these communities, a total development pipeline that exceeds $7 billion and over 23,000 apartments. The company builds high-rise, mid-rise, and garden apartment communities.
LMV’s ownership includes six prominent institutional investors, comprised of foreign pensions, sovereign wealth funds, and insurance companies. Lennar also has a $504 million commitment to the venture.
Currently, the venture has approximately 9,100 apartment homes under development in 31 communities for a total development cost of $3.1 billion. With the combined equity commitments and 50% leverage, LMV has approximately $1.3 billion in dry powder to invest in future opportunities.
Macquarie Capital acted as a financial advisor and placement agent for LMC.
Amundi confirmed on Wednesday that it is interested in acquiring Pioneer Investments, UniCredit’s asset management arm.
Following rumours in the Italian newspaper Il Messaggero, concerning the submission of a non binding offer for the purchase of Pioneer by Amundi, Amundi issued a press release to confirm its interest in Pioneer, since it is “consistently with the growth strategy presented at the time of its IPO.”
However, in the same statement, Amundi denied the close to $4.39 billion valuation attributed to Pioneer in said article and specified that “Amundi re-iterates that its acquisition policy adheres to strict financial criteria, in particular, a return on investment greater than 10% over a three-year horizon.”
However it seems that Jean-Pierre Mustier, Unicredit’s new CEO and a former Société Générale executive, is set to part ways with Pioneer, which has been placed on UniCredit’s group-wide strategic review since last July, when he stated they would even consider a potential IPO. “This is to ensure the company has the adequate resources to accelerate growth and continue to further develop best-in-class solutions and products to offer its clients and partners.”
Publicly traded since November 2015, Amundi is the largest European Asset Manager in terms of AUM, with over 1,000 billion euros worldwide.
