Asia gains new billionaire every other day

The world’s wealthiest individuals are on a roll with billionaires in Asia leading the pack.

Billionaire wealth increased 17 per cent to $6 trillion in 2016, after a decline the previous year, UBS AG and PricewaterhouseCoopers said in a report issued Thursday.

Led by China, the number of the region’s billionaires surpassed the U.S. for the first time.

But don’t shed a tear for the richest folks in the U.S.: American billionaires still control the most wealth at $2.8 trillion.

The gain in total billionaire wealth was twice the 8.5 per cent increase of the MSCI AC World Index.

Asia’s economic expansion saw, on average, a new billionaire created in the region every other day. Should that pace continue, Asia would overtake the U.S. as the world’s largest concentration of wealth in four years, the Swiss bank and the auditing firm said in an analysis of data from roughly 1,550 billionaires.

How fast billionaire wealth grows in Asia will depend in part on how state-driven investment in China is replaced with other sources of capital, UBS chief investment officer Mark Haefele said at a news conference in Zurich on Thursday.

“As China hooks up its capital markets to the global system, it will have a very profound impact on capital flows — on Europe as well,” he said. The execution of Chinese President Xi Jinping’s growth policies will also influence how fast total Asian billionaire wealth overtakes the U.S., he said.

A combination of geopolitical stability in Greater China, rising Chinese real estate prices, infrastructure spending, the growing middle class and buoyant commodity prices all boosted wealth, the UBS report said, citing interviews with Asia’s richest people.

Three-quarters of the world’s new billionaires hail from China and India. The number of Asia billionaires rose by 117 for a total of 637, with self-made billionaires seeing their wealth rise faster than those who became rich through family ties. The U.S. added 25 billionaires for a total of 563.

“In China, one billionaire is created every three weeks,” said Qiong Zhang, head of wealth management for UBS Securities in China. “For many of the first generation of entrepreneurs, a major focus is bringing the business to the capital markets, raising funds and M&A,” she said, adding that the Swiss bank sees Greater China as a “crucial” wealth management market.

The world’s 500 richest people have added $824 billion in wealth so far this year, an increase of 19 per cent, according to the Bloomberg Billionaires Index. Their total net worth is estimated at $5.2 trillion as of Oct. 25.

Peer networks are playing an increasingly important role for billionaires when it comes to making and giving away money, the survey said.

“Informal and formal networks orchestrate deals and investments, as well as helping with other topics such as philanthropy, inheritance and art,” according to the report.