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June 21, 2006
HNWIs continue to diversify investments
THE number of people in Britain with more than $1 million in cash and investments rose more rapidly than in America or the rest of Europe last year.
A survey from Merrill Lynch and Capgemini found that 448,070 Britons have financial assets, excluding their property, that is worth more than a $1 million (£543,000). The figure is 7.5 per cent higher than last year, boosted by rising equity markets, increases in GDP and a high oil price.
Globally, the number of people falling into the $1 million or more category grew by 6.5 per cent, with more and more individuals from the emerging markets of China, India and Russia boosting the total. Altogether, the estimated 8.7 million individuals worldwide in this wealth bracket have net total assets of $33.3 trillion, an increase of 8.5 per cent on 2004’s figure. The super-rich, those with $30 million or more, grew at an even faster pace in 2005 — 10.2 per cent.
There are 85,400 of them worldwide.
Nick Tucker, head of Merrill Lynch global private client UK and Ireland, said: “The number of rich individuals in the UK grew by a solid 7 per cent in 2005, driven by growth in gross domestic product and company market capitalisations.” The figure contrasted with Europe, where those with more than $1 million grew by only 4.5 per cent, and America, where the figure was 6.5 per cent.
High net worth individuals (HNWI) are continuing to diversify their investments, choosing an increasing array of asset classes and geographies. In 2002, only 10 per cent of HNWI’s assets were put in alternative investment such as hedge funds, commodities and private equity; in 2005, that percentage had grown to 20 per cent. Private equity investments have become more popular among the wealthy.
The survey found: “During the technology boom, private equity was a popular alternative investment, but its popularity sank during the subsequent market downturn. Private equity re-emerged as a popular alternative investment in 2004 and continued to attract attention and funds in 2005. In fact, private equity was the primary driver for increased allocation to alternative investments in 2005.”
Those in the $30 million or more category were found to be ahead of market trends on investment. The survey found: “They tend to be more sophisticated and better-informed than other high net worth investors when it comes to managing assets. [Their] behaviours and attitudes about wealth management hold important lessons for high net worth individuals and financial institutions.”
-Times-
Posted by su at June 21, 2006 9:47 AM