Tag Archives: HNWIs

The World’s Uber Wealthy, at a Glance

Fundraising Insights, ,

“Philanthropic activity is now cited regularly as one of the main interests of the global ultra-wealthy population.”  -World Ultra Wealth Report 2018

What is this Report?

The World’s Uber Wealthy, at a GlanceAuthored by Wealth-X, a provider of global wealth intelligence, this report relies on 2017 data to analyze the ultra high net worth (UHNW) population and its share of global wealth. The report comments on the development of the ultra-wealthy segment and examines political and market drivers, regional trends, and wealth distribution. It further illuminates asset holdings, sources of wealth, and philanthropic interests. Wealth-X defines UNHW individuals as those with a net worth of $30MM or more, who represent 1.1% of the total world population.

What are key findings from the article?

  • The number of ultra-wealthy in 2017 grew by 12.9% to 255,810, with total wealth growing 16.3% to $31.5 trillion. It represents a distinct increase from 3.5% growth in 2016, and low market volatility is primarily credited. North America leads the ultra-wealthy at 35%, followed by Europe at 28% and Asia at 27%. The North American ultra-wealthy population grew by 9.5% to 90,440 individuals in 2017.
  • The United States leads the world’s ultra-wealthy, with a population of 79,595 and total wealth of $9.8 trillion.
  • The top ten UHNW cities are as follows: 1) Hong Kong; 2) New York; 3) Tokyo; 4) Los Angeles; 5) Paris; 6) London; 7) Chicago; 8) San Francisco; 9) Washington, DC; and 10) Osaka.
  • Among UHNW individuals, the fastest growing tier is billionaires, which increased to a record high of 2,754 individuals (1.1% of the UHNW population) and demonstrates a significant increase in extreme wealth creation, particularly in Asia.
  • For UHNW portfolios, liquid assets (primarily cash) accounted for the largest portion at 34.9% of the total, followed by holdings in privately owned companies at 32.2% and stock market listed equities at 26.3%. Holdings in real estate and other luxury assets was 6.6%, or about $8MM per individual.
  • As for the sources of wealth, 67.4% of UHNW individuals are self-made (entrepreneurs), with 21.7% a combination of self-made and inherited wealth, and 10.9% inherited wealth.
  • The proportion of women in the UHNW population has risen gradually with 34,944 individuals representing 13.7% of the global wealth. Traditionally, UHNW women have inherited their wealth; however, the number of self-made entrepreneurs is on the rise, with the U.S. being home to more than half this group.
  • Initiatives such as the Giving Pledge are spurring UHNW individuals to give back, and there is growing popularity of alternative giving vehicles, such as donor-advised funds and impact investing. Among charitable causes, education ranks top, with approximately one third of UHNW individuals donating to such causes. Education is followed by social services, healthcare, arts and cultural causes, children and youth, the environment and animals, and museums and libraries (in descending order).
  • Individuals gifting in excess of $5MM are generally found among the very top tiers of the UHNW wealth pyramid, and they hold substantial levels of liquidity. The U.S. is home to more than 75% of the major donor group, and their average net worth is $484MM. UHNW major donors tend to be an average of 6 years older than the global UHNW population, and a larger share of them have inherited wealth.

What can I do as a result?

How do I identify and connect with UNHW individuals?

  • Keep an eye out for major donors from the top 10 UHNW cities. In the U.S., look for New York City, Los Angeles, Chicago, San Francisco, and Washington, DC.
  • If you find a prospect with at least $8MM in real estate and other luxury items (yachts, airplanes, artwork, cars, etc.), that’s an indicator that you may be dealing with an UHNW individual, one who likely has high liquidity.
  • While you don’t want to ignore potential prospects in Asia, Europe, Latin America, and elsewhere, the vast majority of major gift donors live in the United States, so focus your primary efforts there.
  • Since DAFs are attractive giving vehicles to UHNW individuals, begin to build relationships with wealth advisors. As you cultivate the advisors, they may be more likely to recommend your organization to their clients.
  • UHNW individuals have an affinity for philanthropy, so don’t be afraid to court them. Many feel motivated to give back to society, so do your homework.  Can you find an article in which an individual discusses her philanthropic priorities or perhaps how she rose to such great heights or overcame adversity? Was there a particular organization that facilitated her advancement? Then be creative in your approach. How might your mission align with her priorities?  Remember, these are individuals with great liquidity who may be ripe for cultivation.

Additional Resources

What’s New in the 2018 Capgemini World Wealth Report

Fundraising Insights, Wealth & Philanthropy Intel, , , ,

By Elizabeth Eck

“North America accounts for 31.3% of global HNWI population and 28.2% of wealth. The HNWI population in North America grew by 9.9% in 2017 as compared to 7.8% the previous year, while HNWI financial wealth grew at 10.3% to reach US$19.8 trillion. -Anirban Bose

Capgemini WWR 2018What is this article?

The 2018 World Wealth Report gleans data from more than 2,600 surveys from around the world to report on trends for high net worth individuals (HNWI) and ultra-HNWIs.  The report provides insights into asset allocations and investment preferences, such as working with wealth managers and the growing interest in cryptocurrencies.

Capgemini defines HNWIs as those having investable assets of US$1 million or more, excluding primary residence, collectibles, consumables, and consumer durables.

What are key findings from the article?

  • Global HNWI wealth grew 10.6% to surpass the US$70 trillion mark and remains on course to reach US$100 trillion by 2025, with the Asia-Pacific region leading the way.
  • Asia-Pacific and North America fueled the 2017 growth in HNWI population and wealth, with Asia-Pacific accounting for 42.4% of the rise in HNWI wealth and North America accounting for 27.4%.
  • The US, Japan, Germany, and China are the four largest markets for HNWIs, with the US leading at 5.3 million in 2017, a 10% increase over 2016.  Guidestar estimates the number of active US nonprofits courting these individuals at more than 1.8 million, so there is great competition to secure funding from these individuals.
  • Though asset allocation remained fairly stable, real estate saw a significant increase in HNWI asset allocation in 2017, with an increase of 2.8 percent globally to 16.8%, becoming the third-largest asset class, behind equities and cash.
  • In North America, real estate represents 12.4% of HNWI assets, with residential real estate dominating the class at 52.3% – followed by 16.1% in commercial real estate (excluding hotels), 10.2% in land, 7.0% in farmland, and 5.6% in hotels.
  • HNWIs are becoming interested in investing in cryptocurrencies though the wealth management industry remains cautious because of regulatory uncertainty.
  • Wealth management firms are preparing for the entry of BigTech, which Capgemini defines as data-driven tech firms not traditionally present in financial services such as Amazon, Google/Alphabet, Alibaba, Apple, and Facebook.  Leading wealth management firms are investing in intelligent automation and artificial intelligence to prepare for the greater role that BigTech firms will play.

What can I do as a result?

  • Except in cases of public company insiders, the two biggest asset classes, equities and cash, are not readily transparent to a prospect researcher. Real estate, on the other hand, remains the most often used asset in determining gift capacity because of its transparency in the US. Capgemini estimates US real estate at 12.4% of a HNWI’s total assets, so this number can be very useful for estimating net worth.
  • The US leads the pack in the number of HNWIs – 5.3 million. For those prospecting in the US, there is a vast pool of wealth to tap into.  There is also great competition though, with 1.8 million active nonprofits vying for gifts from those individuals.
  • With the burgeoning interest of HNWIs in cryptocurrency and BigTech, there will be a need for prospect researchers and fundraisers to understand better how wealth management firms will be leveraging these vehicles.

Additional Resources