North America reclaimed the top spot with the most millionaires last year as the world’s ultra-rich led the way in raising global wealth to a record high, according to a report by Cap Gemini SA and Royal Bank of Canada.
People in North America with at least $1 million in investable assets climbed 11.5 percent to 3.73 million in 2012, regaining the No. 1 ranking after being overtaken in 2011 by the Asia-Pacific region, according to today’s 17th annual World Wealth Report. High-net-worth individuals in Asia-Pacific increased 9.4 percent to 3.68 million.
The combined wealth of the world’s millionaires rose 10 percent to a record $46.2 trillion last year, after declining 1.7 percent in 2011. North America remained the richest region with $12.7 trillion of high-net-worth assets, compared with $12 trillion in Asia-Pacific, according to the study.
“North America’s lead in both population and wealth is likely to be eclipsed again in future by Asia-Pacific,” Jean Lassignardie, chief sales and marketing officer for Paris-based Capgemini Global Financial Services, said in a statement. Asia- Pacific’s total wealth increased 12.2 percent, outpacing North America’s 11.7 percent growth, he said.
The increase in global wealth was led by the super-rich, those with at least $30 million to invest, whose assets and numbers rose by about 11 percent following declines in 2011, according to the report. A global recovery in stock markets and real estate fueled the increase, the study found.
Latin America
The MSCI AC World Index, which tracks global stocks in developed and emerging markets, climbed 13 percent in 2012 and the MSCI AC Asia Pacific Index jumped 14 percent.
All regions had strong gains in high-net-worth populations and wealth except Latin America, which faltered amid slow economic growth and “challenged” equity markets, according to the report.
The population of millionaires worldwide rose 9.2 percent to 12 million, according to the report.
Global wealth will grow at 6.5 percent annually over the next three years, led by the 9.8 percent increase from the Asia- Pacific region, the report shows.
The dominant source of wealth for the world’s richest people is from entrepreneurship rather than inheritance, according to a separate report yesterday by London-based Barclays Plc. Wealth is being created twice as quickly in developing regions such as Asia-Pacific and Africa, where it took rich people an average of 12 years and 16 years, respectively, to accumulate their assets, the Barclays study found.
Cautious Wealthy
A Pew Research Center study in April found that while the U.S. economy has recovered for households with net worth of $500,000 or more, the recession continues for almost everyone else. Wealthy U.S. households boosted their net worth by about 21 percent between 2009 and 2011 as the rest of America lost 4.9 percent of household wealth during that period, the Pew study found.
The world’s affluent remained cautious in 2012, with a focus on preserving assets, according to the report from Capgemini and Royal Bank’s RBC Wealth Management unit, which surveyed more than 4,400 high-net-worth individuals. A third were primarily focused on preserving wealth, while 26 percent sought to increase assets. Almost 30 percent of high-net-worth wealth was held in cash and deposits, the report found.
“Despite a marked focus on capital preservation and high cash allocations, high-net-worth individuals achieved a record level of wealth in 2012, suggesting further growth lies ahead if trust and confidence in the markets increases further,” George Lewis, group head of RBC Wealth Management and RBC Insurance, said in the statement.
Asset Allocations
Millionaires in the Middle East and Africa were the most focused on wealth accumulation, with about 42 percent making asset growth a priority compared with 33 percent seeking preservation, the study found.
North America’s wealthy held most of their assets in equities, at 37 percent, while those in Latin America and Asia- Pacific, excluding Japan, preferred property. Latin America’s rich had 30 percent of their portfolios in real estate, compared with 25 percent for Asia-Pacific. Millionaires in Europe favored cash and real estate, allocating 27 percent to each.
Capgemini and RBC Wealth Management compiled data from 71 countries accounting for 98 percent of global gross national income. Toronto-based RBC Wealth Management manages more than C$369 billion ($361.5 billion) for customers globally.
