KUALA LUMPUR (June 6): The wealth of global high-net-worth individuals (HNWIs) rose 4.7% in 2023 to hit US$86.8 trillion (RM407.24 trillion).
In its World Wealth Report 2024 published on Wednesday, customer experience, intelligent industry, and enterprise management firm Capgemini Research Institute said the wealth of the HNWIs reached unprecedented levels in 2023, sparked by a rebound in the global economic outlook.
HNWIs are defined as high-net-worth individuals with investable assets of US$1 million or more, excluding their primary residence, collectibles, consumables, and consumer durables.
HNWIs are segmented into three categories based on wealth bands, namely ultra-HNWIs (US$30 million or more), mid-tier millionaires (US$5 million to US$30 million), and millionaires next door (US$1 million to US$5 million).
It said that similarly, the HNWI population increased by 5.1% to 22.8 million globally, and continued to grow despite market unpredictability.
This upward trend offset last year’s decline, and put HNWI trends back on a growth trajectory, it said.
Capgemini said that in 2023, North America registered the strongest HNWI recovery worldwide, with year-on-year growth at 7.2% for wealth and 7.1% for population.
According to the report, solid economic resilience, cooling inflationary pressures, and a formidable US equity market rally drove the momentum.
This trend continued in most markets, for both wealth and population respectively, but to a lesser extent:
- The Asia-Pacific HNWI segment (4.2% and 4.8%) and Europe (3.9% and 4.0%) experienced more modest wealth and population growth.
- Latin America and the Middle East recorded limited HNWI growth, with wealth up 2.3% and 2.9%, and the population up 2.7% and 2.1%.
- In contrast, Africa was the only region where HNWI wealth (1.0%) and its population (0.1%) fell, due to falling commodity prices and declining foreign investment.
Capgemini said as HNWI growth thrives, asset allocations are starting to shift from wealth preservation to growth.
Early 2024 data revealed a normalisation of cash holdings to 25% of portfolio totals, a stark contrast to the multi-decade highs of 34% seen in January 2023.
The report said the UHNWIs, the most concentrated among the wealth bands, hold over 34% of total HNWI wealth, and make up just over 1% of the total HNWI population.
It is estimated that, over the next two decades, ageing generations will transfer over US$80 trillion.
The report indicated that two out of three HNWIs are planning to invest more in private equity during 2024, to leverage possible future growth opportunities.
The World Wealth Report 2024 covers 71 countries, accounting for more than 98% of global gross national income and 99% of world stock market capitalisation.
The Capgemini 2024 Global HNW Insights Survey questioned 3,119 HNWIs, including over 1,300 ultra-HNWIs across 26 major wealth markets in North America, Latin America, Europe, the Middle East and Asia-Pacific.