According to UBS’s 2024 Billionaire Ambitions Report, billionaire wealth has significantly outperformed the global stock market over the past decade. While markets have seen substantial gains, the accumulation of wealth by billionaires has been even more pronounced.
Table Content:
- Billionaires vs. Stock Market: A Decade of Growth
- Billionaires’ Investment Strategies: Shifting Landscape
- Alternative Investments and Geographic Focus
- Tech Billionaires Lead the Wealth Surge
- Billionaire Population Growth and Intergenerational Wealth Transfer
- Conclusion: Billionaires Reshape the Investment Landscape
Billionaires vs. Stock Market: A Decade of Growth
The UBS report reveals a striking disparity in growth between billionaire wealth and major stock market indices. From 2015 to 2024, total billionaire wealth surged by an astounding 121%, reaching $14 trillion from a starting point of $6.3 trillion. In contrast, the MSCI AC World Index, a broad measure of global stock market performance, recorded a 73% gain during the same period. The S&P 500, a key indicator of U.S. stock market health, showed a similar gain of approximately 77%.
Billionaires’ Investment Strategies: Shifting Landscape
UBS research indicates that billionaires are adjusting their investment strategies in response to changing economic conditions, particularly the lowering of interest rates by central banks in the U.S. and Eurozone.
Over the next year, a significant portion of billionaires (43%) plan to increase their exposure to real estate, while 42% intend to boost investments in developed market equities. Seeking safe havens from potential market volatility, 40% of billionaires plan to increase their holdings in gold and precious metals, and 31% aim to increase cash reserves.
Alternative Investments and Geographic Focus
Wealthy individuals continue to show a strong interest in alternative investments. 38% of billionaires plan to increase direct private equity holdings. However, there’s a mixed sentiment towards private equity funds, with 28% planning to increase allocations and 34% aiming to decrease them. Infrastructure investments are favored by 26% of billionaires, and private debt by 35%. Interestingly, a net decrease in hedge fund investments is anticipated, with 27% planning to reduce holdings compared to 23% looking to increase them.
A notable trend is the increasing interest in art and antiques, with 32% of billionaires planning to boost investments in this area, a significant jump from 11% in the previous year.
Geographically, North America remains the preferred investment destination for billionaires, with 80% favoring the region over the next 12 months and 68% over the next five years. This preference is attributed to technological innovation and energy security amid global instability. In contrast, only 11% of billionaires see greater opportunities in China.
Tech Billionaires Lead the Wealth Surge
Unsurprisingly, tech billionaires have experienced the most rapid wealth growth among all sectors. Their combined wealth skyrocketed from $788.9 billion in 2015 to a staggering $2.4 trillion in 2024.
Billionaire Population Growth and Intergenerational Wealth Transfer
The total number of billionaires globally rose from 1,757 in 2015 to 2,682 in 2024, peaking at 2,686 in 2021. Growth has plateaued since then.
A significant factor in wealth dynamics is intergenerational transfer. Over the past 10 years, multigenerational billionaires have inherited a total of $1.3 trillion. UBS projects that billionaires aged 70 or older will transfer a staggering $6.3 trillion over the next 15 years, primarily to family members but also to chosen causes. This projection surpasses the 2023 estimate of $5.2 trillion over 20-30 years, due to asset price inflation and the aging billionaire population.
Conclusion: Billionaires Reshape the Investment Landscape
The UBS Billionaire Ambitions Report highlights the remarkable growth of billionaire wealth, outpacing even robust stock market performance. Their evolving investment strategies, focused on real estate, developed market equities, and safe haven assets, reflect a response to changing economic conditions and a desire to preserve wealth. The significant intergenerational wealth transfer anticipated in the coming years will further shape the investment landscape and potentially impact global economic trends.
