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Global Private Wealth

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How it is generated? Where it is parked?


Global wealth is unequally distributed. A clutch of indivi-duals in developed countries possess large amount of wealth. In developing countries, the wealth is concentrated in few hands and communities. In order to understand the unequal or iniquitous distribution of wealth, we need to keep watch over the annual Global Wealth Report published by the Boston Consulting Group (BCG).

Global private financial wealth grew by nearly 12% in 2014 to reach a total of $164 trillion.
Globally, the total number of millionaire households (those with more than $1 million in private wealth) reached 17 million in 2014, up strongly from 15 million in 2013.
Millionaire households held 41% of global private wealth in 2014, up from 40% a year earlier, and are projected to hold 46% of global private wealth in 2019.
From a regional perspective, the U.S. still had the highest number of millionaire households in 2014 (7 million), followed by China (4 million), which showed the highest number of new millionaires (1 million). Japan was third, with 1 million millionaire households, down from previous years due to the fall of the yen versus the U.S. dollar (with fewer households reaching the $1 million mark in dollar terms).
The highest density of millionaires was in Switzerland, where 135 out of every 1,000 households had private wealth greater than $1 million.
Other countries that followed are:
Bahrain 123
Qatar 116
Singapore 107
Kuwait 99
Hong Kong 94
(Remember these are out of every 1,000 households)
Ultra High Net Worth (UHNW) Households
(A UHNW household is one with wealth to the tune of $100 million)
United States 5,021
China 1,037
UK 1,019
India 928
Germany 697
Density of UHNW Household
(Per one lakh households)
Hong Kong 15.3
Singapore 14.3
Austria 12.0
Switzerland 9.0
Qatar 8.6
Private wealth held by UHNW households (those with above $100 million) grew by a strong 11% in 2014. This resulted in higher wealth for households already in the segment, with substantial increases also coming from households rising up from lower wealth bands.
UHNW households held $10 trillion or 6% of global private wealth in 2014, in line with 2013. At a projected CAGR of 12% over the next five years, private wealth held by the UHNW segment will grow to an estimated $18 trillion in 2019.

Wealth in Equities
From a regional viewpoint, the share of private wealth held in equities was highest in North America (49% in 2014), followed by Asia-Pacific (38%), Japan (34%), and Western Europe (33%). MEA (27%), Eastern Europe (24%), and Latin America (13%) had lower equity allocations.
Wealth in Bonds
The share of private wealth held in bonds was highest in Latin America (37%), followed by Western Europe (27%), MEA (21%), North America (19%), Asia-Pacific (14%), excluding Japan), Eastern Europe (13%), and Japan (7%).
Parking Wealth Offshore
Private wealth flows to places where economy is stable. And a stable economy is linked to political stability. Wealthy people in several countries take their wealth offshore. It is not merely owing to instability. In several developing countries like the Middle East, skills needed to keep wealth inshore are founding wanting. In the new world, the largest shares of offshore wealth were in the Middle Eastern region (31%), Latin America (28%), and Eastern Europe (19%).
In 2014, the Caribbean and Panama remained the preferred destinations for wealth originating in North America, with 54% of offshore wealth placed there. The U.K. (15%) and the Channel Islands and Dublin (15%) were also common destinations. Wealth originating in Singapore, Hong Kong, India, and Pakistan was also inclined to be booked farther away, such as in the U.K. (15%) and Switzerland (22%). For Middle Eastern region wealth booked offshore, Switzerland (37%) was the destination of choice, followed by the U.K. (22%) and Dubai (12%).
(Source: https://www.bcgperspectives.com/content/articles/financial-institutions-growth-global-wealth-2015-winning-the-growth-game)