The ongoing eurozone crisis has affected the fortunes of high net worth individuals in Europe, with their overall investible wealth declining by 1.1% last year.
That’s according to the World Wealth Report 2012, released on 19 June by Royal Bank of Canada's wealth management division and consultants Capgemini.
Following a rise in wealth of 7.2% across Europe in 2010, the fortunes of HNW individuals dropped to $10.1 trillion (€8 trillion) last year, with the report saying 2011 was the “the second most volatile period in the last 15 years”.
“Europe will be top of mind for investors, as repeated flare-ups are likely to keep markets on edge,” said Jean Lassignardie, corporate vice-president of Capgemini Global Financial Services.
Although overall wealth declined in Europe, the number of HNW people – those with fortunes of more than $1 million – rose to 3.4 million from 3.1 million in 2010.
Excluding the Middle East, global wealth declined by 1.7% in 2011, said the report – the first fall since 2008 when the rich saw their fortunes fall by 19.5%. In the Middle East, wealth grew marginally by 0.7% to $1.7 trillion.
But similar to the trend in Europe, the population of HNW individuals in the world also rose by 0.8% to 11 million in 2011.
The movement of wealth from west to east was highlighted in the report, with Asia-Pacific becoming home to the largest number of rich people – 3.37 million – overtaking North America, which had 3.35 million HNW people in 2011. But the level of wealth held in Asia-Pacific was still second to its counterpart – $10.7 trillion compared to $11.4 trillion in North America.
This was largely due to losses in markets such as India and Hong Kong, said Paul Patterson, head of global trust at RBC Wealth Management, at a press conference in London. “Decreasing market capitalisation in India and an increase in its fiscal budget affected the wealth of people in the country. A similar stock market decline affected growth in Hong Kong too.”
India lost 18% of its HNW individuals last year and was overtaken in terms of wealthy citizens by South Korea, which had more than 147,000 rich residents. Meanwhile, Hong Kong saw the number of rich drop by 17.4% in 2011.
Japan, the US and Germany, ranked one, two and three respectively, collectively accounted for 53.3% of the global wealthy population in 2011, up from 53.1% the year before, said the World Wealth Report. China and the UK were ranked fourth and fifth, and were jointly home to around one million HNW individuals.