Millionaire Population Continues To Skyrocket
As the number of humans living in poverty has fallen-a recent Brookings Institution report reveals that between 2005 and 2010, nearly half a billion people escaped extreme hardship while the total of the world's very poor dropped to 878 million people-the ranks of the rich have skyrocketed, according to a recent survey.
Millionaire households' wealth in major economies is expected to grow from an estimated $92 trillion in 2011 to $202 trillion by 2020, with much of that wealth concentrated in the United States and Europe despite strong showings by numerous emerging global markets.
According to the Deloitte Center for Financial Services, which sponsored the report that was conducted with Oxford Economics, global wealth management has entered a new chapter in its evolution. "Identifying and understanding how different market segments are changing can help formulate growth strategies" for wealth managers focusing on the emerging opportunities to serve the world's wealthiest customers, said Andrew Freeman, executive director of the Center.
The Deloitte report provides estimates of the number of households with net wealth above the $1 million, $5 million and $30 million-plus thresholds across each of 25 economies. In addition to the U.S., these include Australia, Brazil, Canada, China, France, Germany, Hong Kong, India, Italy, Japan, Malaysia, Mexico, the Netherlands, Norway, Poland, Russia, Singapore, South Korea, Spain, Sweden, Switzerland, Taiwan, Turkey and the United Kingdom. Among emerging markets, Deloitte expects China to continue to be the driving force in the growth of millionaire wealth, followed by Brazil and Russia, while China and South Korea will join the top ten countries in terms of the total number of millionaires by 2020.
The report notes that while Switzerland may have the highest per capita wealth overall of the countries studied, with $4.2 million in 2011, Singapore may rank No. 1 in 2015 and in 2020, with $4.5 million and $5.4 million respectively in per capita wealth. Australia may make an entry into the top ten in 2020 with 1.6 million millionaire households; the country is also projected to experience the fastest growth rate of the developed economies.
But the real wealth will remain closer to home. According to the report, in 2020, 43% of the world's wealth held by millionaire households is predicted to be in the U.S., while the number of millionaire households there is projected to increase from an estimated 10.5 million in 2011 to 20.6 million in 2020.
California is expected to remain the state with the wealthiest households, and New Jersey will continue to have the greatest density of millionaire households. The East Coast could see the highest growth rates-New York and Florida together are projected to add 1.5 million new millionaire households by 2020.
"These days it's about a lot more than just a few private banks," said Deloitte's Freeman. "Each wealth manager needs to consider their individual footprint and see where it might make sense to capitalize on expected long-term shifts. While there may be enormous growth in the mass affluent sector, many of those customers may also be migrating into the millionaire category."
To see the full report, go to www.deloitte.com/us/globalwealth.
In other news ...
Wealth-X, a firm that helps private wealth managers and others prospect, understand and conduct wealth diligence on ultra-high-net-worth individuals, has released its latest intelligence briefing, which profiles Russia's ultra-wealthy (they have a combined worth of $60 billion) and examines the country's position among BRIC countries (Russia has only 5% of UHNW individuals, yet accounts disproportionately for 16% of total BRIC wealth). For a copy of the report, go to www.wealthx.com.
BNY Mellon has entered into an agreement to acquire Chicago-based Talon Asset Management's wealth management operations, which have more than $800 million AUM. The acquisition, terms of which were not disclosed, will provide BNY Mellon Wealth Management access to the third-largest U.S. wealth market, and existing Talon clients with increased access to alternative investment opportunities as well as expanded private banking and wealth planning services, according to Mellon (www.bnymellon.com). Upon completion of the transaction, expected in the second quarter and which does not include Talon's private equity and hedge fund businesses, Talon staff will become part of BNY Mellon and senior Talon principals Terry Diamond, Alan Wilson, and Edwin Ruthman will assume leadership roles in the Chicago office.
The Silicon Valley Venture Capitalist Confidence Index for the first quarter of 2011 registered 3.91 on a 5 point scale (with 5 indicating high confidence)-up significantly from the previous quarter's reading of 3.75, indicating increasing upward momentum in confidence since its low point in fourth quarter 2008. Conducted by the University of San Francisco, the findings are based on a survey of San Francisco Bay Area venture capitalists. A companion study on confidence among venture capitalists in China found confidence declining to a two-year low on concerns of bubble valuations, inflation rates and political uncertainty. Go to www.usfca.edu for further information.
Hatteras Funds, a boutique alternative investment firm, has added two single-strategy hedged mutual funds to its lineup of alternative mutual fund products. The Hatteras Long/Short Equity Fund and the Hatteras Long/Short Debt Fund provide access to two of the four core strategies available through the Hatteras Alpha Hedged Strategies Fund, which was launched in 2002, according to the Raleigh, N.C.-based company (www.hatterasfunds.com), which manages $2 billion in alternative investment strategies for high-net-worth individuals, institutions, endowments and pensions.
Philadelphia Financial, a Philadelphia-based provider of insurance strategies to advisors of ultra-high-net-worth individuals, has established the Alpha Alliance, a network of distributors with the capability to offer advisors the company's strategic insurance products as part of an overall wealth management plan for their wealthy clients. Go to www.philadelphiafinancial.com for further information.
Foreign investors see the huge long-term growth possibilities that Africa presents, according to Ernst & Young's first Africa Attractiveness Survey, which says the region has one of the fastest economic growth rates and highest returns on investment in the world. The survey combines an analysis of foreign direct investment into Africa over the last decade along with the views of global executives about how and where investment will take place there in the next decade. Go to www.ey.com for further information.
Research and Markets, headquartered in Dublin, has released a new report, Wealth Management Competitor Tracker 2011, which provides expert analysis and opinion on the strategic moves of leading competitors in the wealth management space. Produced each month, the Tracker covers 100 players across Asia-Pacific, Europe, the Middle East and Africa and North and South America. Competitors tracked include BNP Paribas, Emirates NDD, and Raymond James. For more information go to www.researchandmarkets.com/research/704880/wealth_management.
Atlantic Trust, the private wealth management division of Invesco Ltd., has achieved 16 consecutive quarters of positive net flows, according to the Atlanta, Ga.-based firm, which attributes strong client retention and a steady inflow of assets from existing clients and new client relationships from referrals among factors contributing to its success. Atlantic (www.atlantictrust.com), with about $17.5 billion in assets under management, reports that its strongest growth has been in New England, New York, the Mid-Atlantic, Texas and the Pacific Southwest.
The Dow Jones Credit Suisse Hedge Fund Index team has released its 2011 Q1 Hedge Fund Industry Review, which examines the drivers of hedge fund performance and asset growth in the first quarter of 2011. Among key findings: Hedge funds, as measured by the index, were up 2.2% in the first quarter of 2011, posting positive performance in each month of the quarter; the industry saw an estimated $10.1 billion in inflows in the first quarter; and global macro experienced the largest inflows in the first quarter, gaining $3.3 billion, followed by fixed-income arbitrage (+$2.9 billion) and managed futures (+$2.8 billion). Go to www.djindexes.com for further information.
The Baird 2011 Growth Stock Conference will be held May 10-11 at the Four Seasons Hotel Chicago in Chicago, featuring executives from more than 140 of the fastest-growing companies in sectors that include financial institutions, business services, and technology. Go to www.rwbaird.com for further information.
The UBS 13th Annual Global Financial Services Conference will be held May 10-11 at the Waldorf-Astoria in New York City. For information call 212-713-3277, or go to www.ibb.ubs.com/conferences/americas/2011globalfinancialsvcconf/index.html.
The 13th Annual D.A. Davidson & Co. Financial Services Conference will be held May 11 at the Bell Harbor Conference Center in Seattle, Wash. Call 503-619-4948 or go to www.davidsoncompanies.com/events for further information.
The SkyBridge Alternatives 'SALT' Conference 2011 will be held May 11-13 at the Bellagio Resort & Casino in Las Vegas. Keynote speakers for the sold-out event include former President George W. Bush and retired U.S. Army General Colin L. Powell. For information about the 2011 agenda and how to become a sponsor, speaker, or participant at SALT 2012, go to www.saltconference.com.
The 16th Annual Ira Sohn Investment Conference will be held May 25 at the Frederick P. Rose Hall, Lincoln Center, New York. The event will be preceded by the first Ira Sohn Investment Idea Contest, sponsored by the Ira Sohn Conference Foundation. Contest participants are to submit their best investment idea. The winner will present it at the investment conference. For information go to www.irasohnconference.com.
INSITE 2011 Financial Solutions Conference, hosted by Pershing LLC, will be held June 8-10 at The Westin Diplomat in Hollywood, Fla. Seminars include investing in hedge funds for high-net-worth investors. Featured keynote speakers are former President George W. Bush and Gordon Brown, former prime minister of Great Britain. Go to www.INSITE2011.com for further information.
The Family Office Exchange Financial Executives Forum will be held July 13-14 at the JW Marriott in Chicago. For further information contact Karen Emanuelson at 312-327-1212, or go to www.familyoffice.com.
The inaugural Delivering Alpha Conference, sponsored by CNBC and Institutional Investor and featuring big names in the hedge fund and investor communities, along with influential political and economic leaders, will be held September 14 at The Pierre in New York City. Go to http://delivering-alpha.com for further information.
On The Move
David C. McCabe will succeed G. West "Westy" Saltonstall as president of Eaton Vance Investment Counsel (EVIC) on November 1, according to Boston-based Eaton Vance Corp. Saltonstall will continue to serve EVIC as president emeritus from that date. A division of Eaton Vance Management, EVIC provides investment counsel services and custom wealth management solutions to high-net-worth individuals and families, trusts, and foundations.
Kim Wright-Violich is retiring as president of Schwab Charitable, a position she has held for 11 years, on June 30. Under her direction, Schwab Charitable has grown from its founding in 1999 to become the second-largest donor-advised fund in the country and one of the nation's largest charities over all, with$3.2 billion in assets, according to the company.
Horizon Asset Management Inc., Kinetics Advisers LLC, and Kinetics Asset Management Inc., the investment adviser to Kinetics Mutual Funds, Inc., together with various affiliated companies, have merged, effective May 1. The new entity, Horizon Kinetics LLC, has $9.8 billion in assets under management. The company publishes fundamental, contrarian research reports and offers equity, fixed income and alternative investment products for institutional and high-net-worth clients. For further information go to www.horizonassetmgt.com or www.kineticsfunds.com.
Ladenburg Thalmann Financial Services Inc., based in Miami and whose clients include high-net-worth individuals, has entered into a strategic consulting relationship with Norman Malo and Richard Jasper, the founding partners of Wealth Investment Partners LLC. Malo was the former president and CEO of National Financial Services LLC (a Fidelity Investments company), and Jasper, the former director of business development at Russell Investments. Ladenburg has over 1,000 financial advisors and more than $22 billion in client assets.
Baird, a wealth manager based in Milwaukee, has hired financial advisors David Marshall and Gavin Amato to serve as director and vice president at the firm's new wealth management office in Portland, Ore. The two are joined by Dan Buxton, a client relationship specialist, and Jessica Roggenkamp, a client relationship associate. The four will serve clients as The Marshall-Amato Group within Baird's Portland office. Previously, Marshall, Amato, Buxton, and Roggenkamp worked at Morgan Stanley Smith Barney and predecessor firms Smith Barney, Shearson Lehman Brothers and E. F. Hutton. Amato worked at Smith Barney and Merrill Lynch, Pierce, Fenner & Smith.
The Swiss private banking group Julius Baer has acquired 30% of the independent São Paulo-based wealth manager GPS, the largest independent wealth manager in Brazil (with approximately $5 billion AUM), which includes GPS Planejamento Financeiro Ltda. and CFO Administração de Recursos Ltda., for an undisclosed sum. Like Julius Baer, GPS specializes in discretionary portfolio management and advisory services for high-net-worth individuals.
Rogerscasey, an investment solutions firm based in Darien, Conn., that serves institutional asset owners and financial services firms, has hired Hilary Wiek as a director within the firm's Alpha Investment Research Group, effective May 9. Wiek, previously the director of public and private equity for the South Carolina Retirement System, joins the global equity team, and will help to lead Rogerscasey's efforts in identifying best-in-class global equity, U.S. equity and non-U.S. equity managers.
Chicago-based HighTower, a financial services company serving high-net-worth and institutional clients, has expanded with a new advisor team, the Amidei Romano Group, based in Palm Desert, Calif. The team is led by Brian P. Amidei, Joseph G. Romano III and Brett C. D'Orlando, who will serve as managing directors and partners at HighTower. All previously worked at Merrill Lynch.
Fairport Asset Management has appointed Sally Staley, who currently serves as chief investment officer at Case Western Reserve University, as an advisory member of its investment committee. Based in Cleveland, Fairport provides wealth management services, including specialized succession and liquidity planning, to high-net-worth individuals, families and select institutions, and addresses financial issues and education concerns unique to women.
Cantor Fitzgerald & Co., based in New York, has hired Matthew Zolin, Lori Samuels, and Erin Andrews, all previously at Chapdelaine Credit Partners. Zolin has been named managing director of high-yield trading; Samuels, managing director of credit product; and Andrews, senior loan trader.