I can tell you one thing- these people are richer than God,” outcries one character in Kevin Kwan’s novel- Crazy Rich Asians. Featuring a cast comprised entirely of Asian actors, the film adaptation, invites cinema enthusiasts to step into the luxurious realm of Southeast Asia’s ultra-rich society.
Predominantly set with its backdrop in Singapore’s urban hub and occasional lavish escapes to tropical paradise islands, Kwan’s portrayal appeared astonishing. His characters don the rarest vintage Rolex watches, drive Maseratis, and mingle with royalty from around the world. Despite the seemingly extravagant details, Kwan has consistently emphasized that the novel’s characters are indeed based on real-life individuals.
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Of course, it’s worth highlighting that Singaporean society is far more diverse than the affluent portrayal presented in the books. With a remarkable GDP per capita of $133,895, Singapore distinguishes itself as not only Asia’s wealthiest country but also one of the world’s most prosperous. The combination of a rich GDP per capita and a low unemployment rate is the driving force behind Singapore’s economic success. In fact, the country is home to 8,040 multi-millionaires, 336 centi-millionaires, and 26 billionaires.
Asia’s Dominance in Ultra-Wealthy Population
Although Asia experienced an 11 percent decline in its population of ultra-wealthy individuals in 2022, it still surpasses Europe in terms of the number of people in this category. In this context, Ultra-wealthy individuals refer to those with a net worth exceeding $30 million.
The ongoing trend suggests that Asia’s representation among the world’s ultra-high-net-worth individuals will persistently expand, with estimates suggesting it could reach 29% by 2027, compared to the 15% seen in 2004. However, Asia is poised for the most remarkable growth, with numbers projected to surge from 395,070 to 528,100.
According to the report, the global population of ultra-wealthy individuals is projected to reach 528,100 by 2027, marking a significant increase from the 133,000 recorded in 2022.
Europe’s Decline: A Shift in Ultra-Wealthy Numbers
As per Altrata’s World Ultra Wealth 2023 report, in 2019, Asia surpassed Europe in terms of the number of ultra-wealthy individuals for the first time. The total wealth of Asia’s super-rich stood at $12.13 trillion, outpacing Europe’s $11.73 trillion.
With a 7.1% reduction in high-net-worth individuals to a total of 100,850, Europe recorded the second-worst regional performance. The report noted that the significant impact of Russia’s invasion of Ukraine was the primary cause of this decline. Europe’s dependence on energy supplies manipulated by Moscow, combined with rising risk aversion and supply chain disruptions, contributed to the drop.
India’s UHNW Population Growth
India’s ultra-wealthy population registered a 3.2% rise to 8,880 with a combined net worth of over $1.4 trillion, despite the global ultra-high-net-worth (UHNW) population falling by 3,95,070 individuals in 2022.
Part of the credit for this goes to India’s expanding economy, in addition to a growing inclination among businesses to diversify their supply chains away from the Chinese mainland. Instead, they are choosing to relocate their industrial, logistical, and real estate activities to alternative Asian markets.
America remains unrivaled as the richest country
North America, which boasts the world’s largest ultra-wealth market with a collective net worth of $16.47 trillion, experienced a 4% decrease in the number of ultra-wealthy individuals, as reported in the study. This reduction was primarily linked to the U.S. Federal Reserve’s aggressive strategy of raising interest rates.
With inflation reaching its highest point in four decades, the Fed commenced an assertive rate hike strategy in March 2022. Rising risk evasion saw returns on US values fall sharply, with the S&P 500 closing the year down 18% and the tech-heavy NASDAQ Composite index down 32%.
In 2027, North America is projected to maintain its position as the holder of approximately 35 percent of the world’s UHNW wealth, while Europe is predicted to lag behind Asia and America. Despite this, Europe is still expected to witness an expansion in its overall wealth.
Regional Contrasts: Middle East, Latin America, and the Caribbean
Significant increases in the number of ultra-high-net-worth (UHNW) individuals were observed in the Middle East, Latin America, and the Caribbean.
The Middle East witnessed a remarkable 15.7% increase in its ultra-wealthy population, primarily due to a spike in commodity prices, while Latin America and the Caribbean reported a significant 17.5% rise.
“With the largest wealth markets all major commodity exporters, regional asset portfolios were buoyed by improved terms of trade from higher prices”, said the report.
Factors Driving Asia’s Ultra-Wealthy Population
High-net-worth individuals in Asia are trimming their investments in equities. Concurrently, non-conventional investment vehicles are becoming more appealing to Asian investors in pursuit of superior returns, while foreign institutions are eager to participate in this high-growth region. Singapore’s real estate market has outpaced pre-crisis levels, a rarity in today’s global landscape.
Qatar’s vast oil and gas reserves have lifted it out of the league of the world’s poorest nations, affording it one of the globe’s highest per capita incomes. Hong Kong’s wealth is a product of its strategic advantages, including low taxation, virtually unrestricted free port trade, and a highly developed global financial center.
The survey’s results indicate that with greater access to global markets, the region’s millionaires are inclined to invest more of their assets abroad. Asia is increasingly considering internationalizing their investment portfolios, and in the longer term, “shifting their asset allocations towards alternative investments, equities, and fixed income” was emphasized.
On a global scale, the ultra-wealthy population experienced a decline of more than 5.4%, marking the first annual drop in four years. Altrata attributed the first tightening of monetary policy in more than a decade to a generational rise in inflation, causing recent volatility in the market. Despite recent market turbulence, Altrata anticipates growth in the global ultra-wealthy population over the next five years, projecting an increase from 395,070 to 528,100 individuals with crazy gains in Asia. Additionally, North America is expected to continue its dominance as the world’s primary super-wealthy hub.