For the first time in the nine years UBS has tracked the global billionaire class, more new members joining this rarefied group accumulated their riches through inheritance than entrepreneurship.
In the 12 months through April 6, 53 heirs inherited a total US$150.8 billion, besting the 84 newly minted self-made billionaires whose wealth totaled US$140.7 billion, according to the annual UBS Billionaire Ambitions Report, published Thursday morning.
The shift is a “key indicator” that we are now “very much in the midst” of the great wealth transfer, says Judy Spalthoff, head of the UBS Family Office Solutions Group. “Lots of billionaire entrepreneurs are aging and more than a thousand of them are expected to pass US$5.2 trillion to their heirs over the next 20 to 30 years.”
According to the report, there are now 2,544 billionaires globally, up 7% over the 12 month period; their combined wealth has also partly bounced back from a dip during the pandemic, rising 9% in nominal dollars to US$12 trillion. That gain is more or less flat, however, when accounting for global inflation of 8.8%, UBS said.
Both figures remain below the peak in 2021 when there were 2,686 billionaires worth a total of US$13.4 trillion, UBS said.
One reason for the bounceback in wealth tracked by UBS in this latest report was the gains made by the billionaires behind Europe’s consumer and retail businesses, who had lost almost one-fifth of their wealth in the 2021 to 2022 period. A “post-pandemic shopping splurge” in 2022, particularly in France, pushed up profits and share prices for luxury goods and cosmetics companies, benefitting their owners, the report said.
In Europe, the Middle East, and Africa, the number of billionaires rose by 10% to 658 as their total wealth climbed 21% to US$3.2 trillion.
By contrast, there was little change in the Americas, where the number of billionaires rose by 12 to 867 and their aggregate wealth rose by 2.7% to US$5 trillion. Much of this wealth is concentrated in the hands of the U.S.’s 751 billionaires—nearly 73% of whom are entrepreneurs. This group has total assets of nearly US$4.6 trillion.
For the global wealth management behemoth UBS, the wealth transfer now underway is also about “the wealth transition that needs to be planned for,” Spalthoff says.
As the report details, more than half of the 53 heirs that recently became billionaires are stepping away from their family’s business, choosing careers “more suited to their own ambitions, skills, and circumstances,” the report said.
This impulse not to follow their parents in lockstop extends to other realms, too, as young heirs recognizes they need to “reshape and reposition their wealth” if they are to continue the family legacy in an environment that’s very different than what their parents experienced—one influenced by a global pandemic, increasing evidence of climate change, and “a less stable world order and war,” the report said. They are also being affected by “profound technological change and the energy transition,” it said.
All of this is leading to a generation gap that appears larger than in previous periods of wealth transfer. Even billionaires who have been preparing their children for the transition—and many are—are still anxious, Spalthoff says.
“We always talk about this as a process, not a product,” Spaltholff says. “I can’t meet with a family that has an inevitable great wealth transfer happening and sell them a product that solves for everything in one fell swoop. It’s not easy, it’s iterative.”
To get a deeper understanding of how billionaire families are navigating their wealth and the emergence of the next generation, UBS surveyed 79 of its billionaire clients across the world between June 28 and Sept. 17.
Another evident shift between generations is in investing priorities. First-generation wealth creators tend to be more conservative, drawn to private debt and fixed income—43% first-generation billionaires plan to increase allocations to private debt in the next 12 months and 38% expect to add bonds issued in developed markets, the report said.
Among inheritors, however, 59% want to raise direct private equity investments and 55% want to invest more in private-equity funds; still, 36% favor developed market bonds too.
“What was consistent for both inheritors and first-gen is that they noted AI as the biggest commercial opportunity for their operating business and their portfolios over the next year,” Spalthoff says.
When it comes to philanthropy, many high-profile billionaires such as
Elon Musk,
Larry Ellison,
and MacKenzie Scott have pledged to give away the bulk of their fortunes. But that’s a less prevalent path for those with inherited wealth, UBS said. Among first-gen billionaires surveyed, 68% said the objective of their legacy was to fulfill their philanthropic goals and make “an impact on the world,” while only 32% of inheritors said the same.
Instead, billionaires with inherited wealth may be seeking to be more innovative with their for-profit money, Spalthoff says.
“They want to do more social finance, development impact bonds, social impact bonds. They recognize the reality that the sustainable development goals aren’t achievable with the level of giving that’s happening,” she says. Instead, they are thinking “how can we from a commercial perspective, but also from a philanthropic-capital perspective, do more with what we have.”
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