Last updated: 18:07 / Tuesday, 7 May 2013
Private Wealth Brazil Forum

Brazil's Economic Hurdles Have Reduced the Number of UHNWI and their Total Wealth

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Brazil's Economic Hurdles Have Reduced the Number of UHNWI and their Total Wealth
  • UHNW population growth in Brazil has suffered from the steep drop in GDP growth but may stabilize should appropriate policies be adopted.
  • The need to invest in energy and transport infrastructure, prerequisites for future growth, is urgent and should be at the forefront of government policy.
  • Brazilian UHNW individuals are Mobile and Versatile, with at least 10% of UHNWI’s conducting business primarily outside of Brazil and at least 9% owning residences outside of Brazil.

UHNW population growth in has suffered from the steep drop in GDP growth but may stabilize should appropriate policies be adopted. This is one of the conclusions highlighted in the World Ultra Wealth Report 2012-2013 by Wealth-X, which, on the other hand, notes that Brazil’s attraction as an investment destination is supported by its net global creditor status, stable external liquidity position as well as enviable international reserves, which are approaching the US$380 billion mark, approximately half the region’s reserves. "Though the negative impact on an appreciating currency is widely recognized, there is official support for policies that support a strong Brazilian Real", it adds, noting that the Real is expected to appreciate in view of excess global liquidity and investor thirst for high yield investment options, particularly in terms of global fixed income investments.

The total wealth in Braziliam UHNWI's hands has fallen 6.7% from a year ago reaching US$865 billion while the number of UHNW individuals falls 1.7% up to 4,640 individuals.

According to the report, further liberalization of state-controlled sectors and companies, such as state-controlled banks and Petrobras, could boost Brazil’s attraction for investors, who have felt locked out of state controlled monopolies. Brazil reportedly received close to US$60 billion FDI flows from June 2011-2012. "The need to invest in energy and transport infrastructure, prerequisites for future growth, is urgent and should be at the forefront of government policy".

Other hurdles that Brazil potentially faces would include, the inclination towards increased trade protectionism perceived growth in corruption and the need to address challenges face by the manufacturing sector in relation to the tax structure.

Wealth-X analysis shows there are 49 billionaires in the country. This group of billionaires, representing the top 1.1% if the UHNW population, control 34.7% of the total fortune attributable to the ultra wealthy segment. On average, these billionaires are US$6.1 billion each.

The lowest tier of the UHNW group represented by those worth US$30 million to US$49 million is the largest group, making up 40.8% of the total UHNW population in Brazil. They have combined fortune US$75 billion or 8.7% of the total wealth of Brazil’s ultra affluent. The report concludes pointing out that the Brazilian UHNW individuals are mobile and versatile, with at least 10% of UHNWI’s conducting business primarily outside of Brazil and at least 9% owning residences outside of Brazil. 

Next month, Latin Markets is bringing over 400 industry leaders to the Private Wealth Brazil Forum on June 11 at the Tivoli Hotel in Sao Paulo. The one day forum focuses on providing updates regarding regulation, investment management, trust issues and strategies to protect and grow wealth. You can register through this link.

For your information...

Next month, Latin Markets is bringing over 400 industry leaders to the Private Wealth Brazil Forum on June 11 at the Tivoli Hotel in Sao Paulo. The one day forum focuses on providing updates regarding regulation, investment management, trust issues and strategies to protect and grow wealth. You can register through this link.

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