Consulting firm Capgemini has released its latest World Wealth Report, which tracks the spending and investing habits of the world’s high net worth individuals (HNWIs).
High net worth individuals are defined by the group as those who have investable assets of US$1 million (R14 million) or more – excluding primary residence, collectibles, and consumables.
The investible assets include the value of private equity holdings stated at book value, as well as all forms of publicly quoted equities, bonds, funds and cash deposits – while also accounting for undeclared savings.
According to the report, South Africa has 90,100 HNWIs at the end of 2018, down from a peak of 92,200 recorded at the end of 2017.
Not only has the country lost 2,100 dollar millionaires over the period, the millionaires still in the country also got poorer over the period.
In 2017, South Africa’s 92,200 millionaires held US$1,353 billion in wealth, averaging US$14.67 million (R208 million) per person. In 2018, millionaire wealth in the country totalled only US$1,238 billion, averaging US$13.74 million per person (R195 million) among the 90,100 millionaires – a loss of US$930,000 (R13 million).
|HNWIs||92 200||90 100||-2 100||-2.3%|
|HNWI Wealth||$1 353.3 billion||$1 238.4 billion||-$114.9 billion||-8.5%|
|Average||$14.678 million||$13.745 million||-$933 000||-6.4%|
|ZAR (1 USD = 14.17)||R208.0 million||R194.8 million||-R13.2 million|
While using different metrics, Capgemini’s data reflects similar findings made by New World Wealth, which noted in a recent report that South Africa had lost as many as 4,400 dollar millionaires in the past year.
New World Wealth also stated that 2018 was a poor year for wealth in the country as total private wealth held by people living in SA, declined 10%.
The fortunes of South Africa’s wealthy tracked global trends, with Capgemini noting that after seven consecutive years of growth, global HNWI wealth declined in 2018, primarily driven by a slump in equity-market performance and slowing economies in key regions.
“Amid significant global wealth decline, Asia-Pacific and European-region HNWIs were most affected, given declining markets and decelerating economic growth (especially for Asia-Pacific),” the group said.
Asia-Pacific accounted for half of the US$2-trillion global wealth falloff, while Europe accounted for about one-quarter of the overall decline – or US$500 billion.
Most of the global HNWI wealth decline can be attributed to the higher wealth segments. Ultra-HNWIs (US$30 million or more) accounted for 75% of the decline, and mid-tier millionaires (US$5 million to US$30 million) made up 20% of the total global decline, Capgemini said.
According to the report, there are just over 18 million HNWIs in the world, 90% of which are in the US$1 million to US$5 million band (16.24 million people). 1.6 million are in the US$5 million to US$30 million band, and 168,000 are in the US$30 million-plus band.
The United States is still home to the most HNWIs, with 5.3 million, followed by Japan (3.15 million), Germany (1.35 million) and China (1.19 million).
Together these nations account for 61.2% of the global HNWI population.