The wealth of billionaires is ‘fleeting’ says a study of their demographics
over the past 20 years. UBS Group AG and PwC published a joint report on
billionaires from 1995 to 2014 on December 15 2015 called ‘The changing faces
of billionaires’ (Finchannel.com, December 28, 2015). In 1995 there were 289
billionaires in the world. In 2014 there were 1,347 billionaires. The report
details their demographics, their volatility in the business sector, and their
personality traits.
The original group of
billionaires and their volatility
The original 289 billionaires in 1995 were tracked. The report found that
only 126 (44%) of them are still billionaires, showing the volatility of wealth
over 20 years. The decrease was due to death, family splits, or business
failures. Since 1995 there were 1,221 new billionaires bringing the current
total to 1,347 in 2014. The 126
continuing billionaires created 21% of the total wealth of all of the current
billionaires, which means that their wealth increased over time – multiplying
their wealth by a factor of 3.8 (outperforming the global GDP growth rate of
2.5).
Age and their
challenge
Almost 66% of the current 2014 billionaires were over 60 years of age. Over
75% of current billionaires have two or more children. Therefore their
challenge is to avoid wealth dilution as the following generations grow larger.
This includes internal ‘politics’ and dynamics, as well as external forces,
such as politics, taxes, global regulations, economic crises, and legal
challenges.
Gender and their rise
The number of female billionaires has increased faster than the number of
male billionaires over the 20 year period, growing by a factor of 6.6 compared
to a factor of 5.2 for men. Asian females increased their growth more rapidly
during the previous 10 years. In 1995 there were 3 Asian female billionaires
and in 2014 there were 25. In Europe there were 21 female billionaires in 1995
and 57 in 2014, compared with 37 in America in 1995 and 63 in 2014.
Female billionaires are generally spearheading a family business – these
include 96% in Asia, 63% in Europe, and 57% in America. Female billionaires are
either in family businesses, philanthropic enterprises, or governance.
Female billionaires in Asia comprise 17% of the global female population
and are generally younger than their global counterparts. In Europe and
America, female billionaires are mostly multi-generational billionaires (93% in
Europe and 81% in America). However, the younger female Asian billionaires are
having a stronger role in their family business than previous generations of
Asian females.
Sectors, strategies,
and personalities
Of the 126 original billionaires in 1995, the sectors that prevailed
included: (1) consumer and retail, (2) technology, and (3) financial services.
These sectors remained strong throughout the 20 years, making 66% of the
wealth. The technology sector in particular over 20 years has been the basis
for the most enduring billionaires. Sectors that showed more volatility
included: (1) industrials, (2) real estate, and (3) health industries.
The strategies for enduring wealth were: (1) adhering to the initial family
business, (2) establishing strong governance, and (3) a clear family identity
and culture. Particularly for family businesses, there was a strong strategic
direction and long-term planning.
The report showed that there was no typical personality of the current
billionaires. However, all showed a focus on building a lasting legacy for
future generations. The report identified consistent personality traits as
being essential to entrepreneurial success – for both genders. These three
personality traits included: (1) smart risk taking, (2) an ‘obsessive’ business
focus, and (3) dogged determination.
MARTINA NICOLLS is the author of:- The
Shortness of Life: A Mongolian Lament (2015), Liberia’s Deadest Ends (2012),
Bardot’s Comet (2011), Kashmir on a Knife-Edge (2010) and The Sudan Curse
(2009).
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