The Rich Got a Bit Poorer Last Year

The wealthy took a big hit last year.

The global population of billionaires sank for the first time since 2018, dropping 3.5% to 3,194, while their wealth declined by 5.5% to US$11 trillion, London-based Altrata, a data firm focused on the rich, reported in its annual Billionaire Census earlier this week.

The drop in wealth was the second-largest fall in the last decade, although Altrata noted that it only partially offset a double-digit jump in billionaire wealth in 2021. The company’s report draws from data collected by its Wealth-X unit.

Zooming out, the global population of those with US$1 million or more in assets fell by 3.3% to 21.7 million individuals, while their wealth sank by 3.6% to US$83 trillion, Paris-based Capgemini, an information technology and services consulting company, said in its annual World Wealth Report released on Thursday. The drops are the biggest in 10 years, Capgemini said.

The population of the ultra-rich, those with at least US$30 million in assets, fell the most, sinking 4.6% last year after a 9.6% surge in 2021, the company said. The wealth of this group of 210,000 individuals fell by 3.7% last year.

Altrata noted that billionaires represent just 0.8% of those with at least $30 million or more in net worth, yet they have a 24% share of this group’s total wealth.

Both Altrata and Capgemini credit slumping economies, falling stock markets, rising interest rates, and geopolitical tensions as contributing to the declines. The reports also both noted that many of the world’s richest responded by turning to wealth preservation strategies.

Among billionaires, this had mixed results, Altrata said. Those who made their money in technology, healthcare, and real estate lost more than 5% of their wealth last year, while those whose wealth accumulated through aerospace and defense, construction and engineering, and food and beverage, saw their fortunes rise, the company said.

According to Capgemini, two-thirds of those with US$1 million or more turned to wealth preservation by cutting their stock holdings by nearly six percentage points to 23% of their total portfolios and boosting their cash and cash-equivalent holdings by almost 10 percentage points to 34% as of January this year.

While global and domestic economies, capital markets, and currency movements affect all the rich, Altrata noted that gains or losses are also due to individual strategies for business and investments, wealth planning, taxes, and philanthropy.

“No billionaire’s asset structure is the same as another’s, and the impact on their wealth will be different for each person,” the report said.

The Billionaire Census also reported that the richest of all, those with US$50 billion or more, lost 23.2% of their wealth, while those at the bottom of the pyramid, with US$1 billion to US$2 billion in assets (representing just over half of all billionaires), lost 3.2%.

Most billionaires, 955, live in the U.S., although the population dropped by 2.1% last year. There are 357 billionaires in China, down by 10.8% and 173 in Germany, down by 1.7%. The only population gains reported last year were in Singapore, which now has 54 billionaires, up by four; and in Moscow, which has 76 billionaires, up by one.

The average age of the world’s billionaires is 67, with those under 50 accounting for just 10% of the total, Altrata said. There are more female billionaires under 50 than over, although they comprise just under one-fifth of the under-50 group.

While the population of rich individuals, and their total wealth, dropped in Europe, Asia Pacific, and North America last year, both the population of the rich and their wealth rose in Africa, Latin America, and the Middle East, Capgemini said.

The number of rich in Latin America rose by 4.7% as their wealth increased by 2.1%; Africa’s rich gained 4.3% new members who combined wealth increased by 1.6%, while the Middle East’s rich gained 2.8% new members as their wealth rose by 1.5%, Capgemini said.