Where the richest won and lost money in 2020
One thing that mattered a lot in terms of the pandemic’s effect on the ultra-rich was the individual’s primary industry, and last year their fortunes unfolded differently depending on which industry they were attached to. .
After excluding billionaires from their analysis, the researchers found that only two of the top five industry groups saw a related increase in wealth in 2020:
- Banking and Finance, 24.7% of UHNW; year-to-year variation, -0.3%.
- Business and consumer services, 10.1%; annual change, 0.8%.
- Real estate, 6.8%; annual change, -0.7%.
- Non-profit and social organizations, 6.5%; annual change, 0.1%.
- Hospitality and entertainment, 5.1%; annual change, -0.3%.
The report noted that the marginal expansion of wealth in the nonprofit sphere largely reflects the asset allocations of individuals, a combination of public and private equity and liquid assets. These assets are managed to protect their wealth, some of which are devoted to philanthropic activities.
Age also had an impact on the performance of ultra-wealth in 2020. The fortune of the under-50s, the youngest and by far the smallest cohort of wealthy in absolute numbers, increased by the margin the last. more important, contributing to almost two thirds of the 2% overall. annual increase in the total wealth of the very wealthy.
Technology as a primary industry accounted for a greater proportion of individuals in this group than in the others, according to the report.
The wealth of people between 50 and 70, the largest age group, grew at the second fastest rate in 2020, contributing 0.5% of the wealth growth of the wealthy. Banking and finance, the growing business and consumer services sector, and technology have helped propel this expansion.
About a third of ultra-rich people are over 70. Many continue to be active in their business operations to varying degrees, but researchers have found a clear tendency to devote more of their time to philanthropic initiatives.
According to the report, this may partly explain the group’s negligible contribution to the overall wealth growth of the high net worth last year. The performance of their private and public holdings – and the exposure of their liquid assets to currency fluctuations in various parts of the world – also played a role.