Global ultra high net worth population falls 6%

The global ultra high net worth (UHNW) population declined by 6 per cent in the first half of this year to 392,410 individuals, says the World Ultra Wealth Report 2022 by Wealth-X.   

The fall represents a sharp reversal from 2021 and the first downturn in UHNW numbers since 2018 as wealth portfolios were hit by shockwaves across the global economy, triggered by the war in Ukraine, the report noted.

Following historical highs in recent years, this downturn saw the combined net worth of the UHNW population fall to $41.8 trillion in the first half of 2022.

This erased a large proportion of the previous year’s gains and implied a drop in the average level of wealth among the UHNW class.

At the turn of 2022, the general tone had been one of cautious optimism, anticipating a strengthening post-virus global recovery and further expansion of wealth portfolios against a backdrop of rising confidence, released household savings, renewed investment, and with capital markets still flush with liquidity from the pandemic.

North America

North America saw the most significant fall in UHNW population of any region in the first half of 2022.

In contrast with the vibrant growth in 2019-21, the UHNW population in this region declined by almost 10 per cent in the first half of 2022 to 134,530 individuals.

The main hit to wealth holdings in North America came from a slump in capital markets, which were spooked by aggressive policy tightening by the Federal Reserve, which signalled an abrupt end to the decade-long bull market in risk assets.

Regional wealth portfolios received some support from the US dollar, which appreciated against most major currencies in response to the Fed’s relatively hawkish policy stance, but this only partially countered wider capital-market losses, the report said.    

Asia

Following double-digit growth in each of the last three years, the ultra wealthy population in Asia fell by 3.9 per cent in the first half of 2022 to 116,080 individuals.

Economic activity and business confidence were constrained by China’s zero-Covid lockdown policy, which hindered production and disrupted supply chains across the region.

Overall, there was a mixed performance in Asia’s major wealth markets. South Korea’s tech-heavy stock market fell sharply, as did wealth holdings in India. Despite its strict stance on Covid-19, China’s equity markets held up slightly better amid official policy easing measures.

Europe

The world’s third-largest ultra wealth region recorded a 6.9 per cent decline in its UHNW population over the first half of 2022 to 100,370 individuals while collective net worth slumped by 11.5 per cent to $10.6 trillion. 

Real-term activity in the region was supported by a strong rebound in consumer-facing services, such as hospitality and travel, as winter lockdowns were lifted.

However, market sentiment was hit hard by the Russian invasion of Ukraine, reflecting the region’s high dependence on Russian energy imports, the wider geopolitical implications of the conflict, and the rapid pass-through of inflationary shocks, primarily via soaring energy and food prices. 

Top UHNW countries

The US, China, and Germany were ranked the top three UHNW countries while France, Switzerland, and Italy came in 8th, 9th, and 10th respectively. China was the only major wealth market to see a rise in its UHNW population in the first half of 2022.

The 10 largest ultra wealth markets are located across three regions – five in Europe, three in Asia, and two in North America. This pattern has remained largely unchanged over the past decade. 

Top UHNW cities

The top 10 cities are home to around one-fifth of the world’s UHNW population, with Hong Kong, New York, and Los Angeles ranking first, second, and third respectively.

Despite a steadily weakening macroeconomic backdrop in the UK, London was the only top city to record an increase in its UHNW population. The top 10 cities accounted for 18.5 per cent of the global UHNW population in the first half of 2022.

Demographics

The world’s ultra wealthy population remains heavily male-dominated, with women accounting for only 11 per cent.

The proportion of ultra wealthy women has seen a gradual upward trend over the past five years, influenced by the shifting pattern of global wealth distribution, slowly changing cultural (and boardroom) attitudes, growth in female entrepreneurship, and the rising frequency of inter-generational wealth transfers. 

One in four UHNW females has attained their wealth solely through inheritance, which includes some of the world’s wealthiest women, such as Alice Walton and Jacqueline Mars. This is in contrast with just one in 20 ultra wealthy men receiving their wealth solely via inheritance.