Global private financial wealth is set to reach $222.1 trillion in 2019, research by the Boston Consulting Group forecasts, up from $164.3 in 2014. While the US still holds the biggest proportion of the wealth, at 31%, the Asian region has been catching up and is now the second-wealthiest region of the world and expected to be the wealthiest by 2019. The research also shows that the ultra-high-net-worth households will experience the fastest growth rates in the coming years.
In its recently released report ‘Global Wealth 2015: Winning the Growth Game’, the Boston Consulting Group (BCG) examines the global private financial wealth*; its size and growth, the distribution, and its managers. The study covers 62 countries that, together account for 94% of global GDP in 2014.
In 2014, the global private financial wealth increased by 11.9%, from $146.8 to $164.3 trillion, which is a slightly smaller increase than the year before (12.3%). While the US still holds the biggest amount of wealth $50.8 trillion, the biggest increase, at 29.4%, is seen in the Asia-Pacific (excluding Japan) region. As a result of which, the region surpassed Europe (Western and Eastern) and is now the second-wealthiest region of the world, holding $47.3 trillion.
Of the $17.5 trillion increase in wealth, almost three-quarters (73%), which is $13 trillion, was generated by existing assets, with the other 27% ($5 trillion) by newly created wealth.
The global wealth is forecasted to grow to $222.1 trillion by 2019, which equals a CAGR of 6.2%. The Asia-Pacific region will experience a compound annual growth rate (CAGR) of 9.7% between 2014 and 2019, and is expected to reach $75.1 trillion, surpassing the US at $62.5 trillion. The highest CAGR of 12% is foreseen for Latin America, growing its wealth from $3.7 trillion to $6.6 trillion.
By 2019, the Asia-Pacific region will account for over a third (34%) of the total global wealth, up from 29%. The US, now accounting for the biggest share (31%), will drop to second place at 28%, followed by Western Europe at 22% (down from 24%).
The research shows that in 2014, the number of millionaire households (those with more than $1 million in private wealth) reached 17 million, accounting for 41% of global private wealth with a forecasted share of 46% in in 2019.
The wealth held by the ultra-high-net-worth (UHNW) households (those with more than $100 million) grew with 11% to $10.2 trillion (which is 6% of the global wealth). BCG forecasts that this group will experience the biggest growth between 2014 and 2019, both in wealth (growing with 12%) and number of households (growing with 19%). The average wealth per household, however, is expected to drop with 5.7% in the coming years.
* BCG’s definition of wealth includes cash deposits, the net amount of listed securities held either directly or indirectly through managed funds, and life and pension assets.