World's high-net-worth population up by 6% in 2007

FWR Staff

24 June 2008

HNW population up 6% despite mature-market slowdown in year's second half. Backed by strong production and market-capitalization growth -- globally at first; then mainly in emerging markets -- the number of millionaires worldwide increased 6% in 2007 to 10.1 million, with total assets held by these high-net-worth individuals up 9.4% to $40.7 trillion, according to the 2008 World Wealth Report by Capgemini and Merrill Lynch.

The number of individuals with at least $30 million in financial assets increased 8.8% to 103,300 in 2007, while their assets increased 14.5% to about $15 trillion.

And last year, for the first time, average assets held by those with $1 million or more in financial assets breached the $4-million mark.

Transition year

Though the pool of personal wealth held by people and families with at least $1 million increased last year, it grew at a slower rate than the 11.4% surge recorded by Merrill and Capgemini in 2006 -- a deceleration the latest World Wealth Report attributes to 2007 having been a period of transition for markets and economies around the world.

"The first half of 2007 consisted of steady worldwide growth, while the second half was marked by a sharp divergence between mature and emerging economies."

So, while a slowing U.S. economy "weighed heavily on key mature regions," growth in emerging markets "boosted gains around the globe," the report adds.

The divide

Driven by a record wave of IPOs and increasing levels of non-domestic investing, many emerging markets extended winning streaks of robust gains last year. So, while most mature-market indexes saw mid-range single-digit gains in 2007, emerging markets like the Shanghai and Bombay exchanges saw respective year-over-year gains of 303% and 115%.

"The divide between market capitalization growth in mature and emerging economies was significantly more pronounced in 2007 than in previous years," says Bertrand Lavayssière, head of Capgemini's Global Financial Services division. "Despite slowdowns in the growth of traditional stock exchanges and significant market volatility, several emerging market exchanges experienced robust gains in 2007, further accelerating global wealth."

In the U.S., the high-net-worth population increased 3.7% in 2007 to 3 million; in Canada the growth rate was 10.4% as the number of U.S.-dollar millionaires rose to 274,000. The U.K. and Germany saw high-net-worth population increases of 2.1% and 3.5% respectively.

Despite a slight slowdown in GDP growth last year , India led the world in high-net-worth population growth, adding 23,000 new millionaires for a total of 123,000, a gain of 23%. China came next with 20.3% -- mainly on the back of stock-market gains. Brazil's high-net-worth population increased by 19.1% on market-capitalization growth of 93% and real GDP growth of 5.1%.

Here's the whole report. -FWR

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