This is one of the many insights thrown up by the inaugural Wealth-X and UBS Billionaire Census 2013, released yesterday.
The report affirms Asia as a wealth hotspot: Asia saw the highest percentage rise in billionaire population (3.7 per cent from 2012 to 508 individuals). It also experienced the strongest surge in wealth - 13 per cent to US$1.18 trillion.
These figures suggest that Asia "is driving the tectonic shifts in wealth globally", said a joint statement by UBS and Wealth-X. The latter researches the ultra-high net worth segment, defined as those with assets of at least US$30 million.
Asia contributed the largest number of new billionaires this year at 18, followed by 11 in North America. Globally, there are some 2,170 billionaires, compared with 2,160 in 2012.
Their combined wealth grew 5.3 per cent to US$6.5 trillion from US$6.19 trillion last year. Interestingly, their combined wealth this year is enough to fund the US budget deficit until 2024, and is greater than the GDP of every country except the US and China.
By 2020, UBS and Wealth-X expect the billionaire population to exceed 3,800. This is a projection based on existing "demi-billionaires" - that is, those with a current net worth of between US$500 million and US$999 million.
Said the report: "When taking into account those not yet worth US$500 million, the increase in the billionaire population is likely to be even higher.
"For example, many 'technopreneurs' continue to increase their wealth rapidly, and are able to achieve billionaire status in the span of only a few years."
China has the second-largest billionaire population globally, after the US. It has 157 billionaires with a combined net worth of US$384 billion; the US has 515 billionaires with a net worth of just over US$2 trillion.
Singapore has the fifth-largest billionaire population in Asia, and the 18th largest in the world. In terms of the world's cities, it ranks sixth. New York is the top choice among billionaires, with 96 choosing to base their primary businesses there.
According to the data, the average billionaire globally is worth US$3 billion. About 35 per cent or US$1.27 billion of this wealth is in private holdings. Another 35 per cent or US$1 billion is in public common stock. Cash accounts for 18 per cent or US$545 billion, and real estate 3 per cent or US$78 billion.
The report said that the liquidity cushion is higher than it was before the global financial crisis in 2008, "suggesting that the old mantra of 'cash is king' remains as relevant as ever".
Globally, about 60 per cent of billionaires are self-made, while 20 per cent inherited their wealth. In Singapore, 44 per cent are self-made and 15 per cent inherited their wealth. Some 41 per cent inherited wealth and subsequently grew their fortunes.
In a foreword in the report, Josef Stadler, UBS global head of ultra-high net worth (UHNW), said that the top UHNW segment continues to grow even as the path to economic recovery remains challenging.
"This makes the billionaire segment interesting to any bank with a strategic UHNW foothold. Yet, billionaire clients have particularly complex demands, and the challenge lies in providing them with the right offering to help them achieve their financial goals."
Source: Business Times, 7 Nov 2013