A global study of trends among ultra-high net worth individuals shows North America remains the dominant region.

The ranks of ultra-high net worth individuals rose by 10 per cent last year, taking the global population to 129,730, with a combined worth of $26.4 trillion, according to an annual wealth report by Knight Frank, the real estate consultancy.

When it comes to having the most cities with the largest concentrations of UHNW individuals, North America dominates the field, although in China, the city of Guangzhou leads the firm’s Prime International Residential Index, with European markets chalking up a recovery.

When looking at how specific ultra-wealthy populations have fared between 2012 and 2017, the picture is mixed, Knight Frank said. While the number of people with $50 million or more in net assets – the report’s definition of "ultra-HNW" - rose in North America (+31 per cent), Asia (+37 per cent) and Europe (+10 per cent), there were falls in the remaining five regions, most notably in Latin America and the Caribbean (-22 per cent) and Russia and CIS (-37 per cent).

“This trend in wealth creation mirrors the growing momentum of the global economy since the start of 2017. Solid forecasts for the global economy underpin the wealth specialist’s prediction that the number of individuals with net assets of $50 million or more will have grown by a further 40 per cent by 2022,” the report’s authors said.

North America remains the world’s largest wealth region – some 34 per cent of the world’s ultra-wealthy are based there. That region’s ultra-wealthy population increased by further 5 per cent last year, taking the total number to 44,000.

Knight Frank’s City Wealth Index for this year has New York in top spot, followed by London, San Francisco, Los Angeles and Chicago. After these come Singapore, Paris, Tokyo, Hong Kong and Washington DC. New York has the highest number of cities where households earn an annual amount of $125,000 and above, with Los Angeles in second spot.

In the wealth region stakes, Europe narrowly lost its second place spot to Asia, despite a 10 per cent rise over the past year in the number of Europeans with $50 million or more, taking its total to 35,180. A 15 per cent rise in Asia’s ultra-wealthy cadre took its population to 35,880.

The data also showed that the number of people with $5 million or more in net assets around the world rose by 9 per cent in 2017, with the number of ‘demi-billionaires’, those with $500 million or more in net assets, climbing by 11 per cent.

Among other findings, Knight Frank said Brexit “appears to have had limited impact on London’s standing – with the city coming second in the Knight Frank City Wealth Index”.

Enthusiasm for private capital as a channel increases – it is fuelling growth of global real estate deals worth more than $1.0 billion, the report said.

Golden visas
Obtaining secondary passports and residencies is a growing trend for the world’s wealthiest people, Knight Frank’s annual Attitudes Survey found. It survyed views of 500 private bankers and wealth advisors, who between them represent over 50,000 clients with a combined wealth of more than $3 trillion.

Globally, 34 per cent of UHNW persons already hold a second passport and 29 per cent are planning to buy one, while 21 per cent are considering emigrating permanently. For those emigrating, the UK is the top choice globally.

Considering wealth generation, 72 per cent of advisors stated that their clients’ wealth had increased over the past year. However, looking ahead, fewer think that it is likely to increase in 2018 (67 per cent).

Another major concern for wealthy individuals is passing wealth to the next generation. When asked if their clients had a robust succession plan in place, the response was just 53 per cent, with a high of 65 per cent in the US and a low of 40 per cent in Kenya.

Other findings
Investments are evolving; 62 per cent of the survey’s respondents said that their clients had increased their exposure to equities over the past year. However, the second largest rise was in real estate, with 56 per cent on average reporting an increase across the globe.

Blockchain technology is only having a tangible impact for 4 per cent of respondents; some 41 per cent of then said that most of their clients are aware of blockchain, but have not considered the impact it might have on them.