World Wealth Report: India Has Second Fastest Global Growth of Super Rich

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Sept. 27 – The number of high net worth individuals (HNWI) in India rose by 22 percent last year, making it the second fastest growing population of wealthy individuals in Asia over that time, according to Capgemini and RBC Wealth Management’s 2013 World Wealth Report (WWR).

A high net worth individual is someone with investable assets worth over US$1 million.

In 2011, India was home to 125,000 HNWI. This number rose to 153,000 in 2012, representing a combined worth of US$589 billion, thanks to “positive trends in equity market capitalization, gross national income, consumption and real estate,” according to the WWR.

These HNWI, seeking productive asset allocation, focused heavily on real estate investments in 2012. Along with other Asia-Pacific countries, excluding Japan, HNWI investors allocated 26.5 percent of total investments to the real estate sector. Cash and deposits were also popular among high net worth individuals in Asia-Pacific, representing 22.7 percent of the region’s portfolio. At 22.3 percent, equities were the next most popular asset destination for these wealthy investors. Fixed income and alternative investments were the least popular allocation of assets, representing a combined value of 30.4 percent of total assets.

Among countries benefitting from positive equity trends, the WWR highlighted the especially robust performance in Germany, Mexico and India, which saw its broader market indexes rise by over 23 percent in 2012 thanks to monetary easing and financial reform measures.

“GDP growth of 5.5% which is more than double the global average, combined with strong equity market performance across the region and strong real estate market performance in some markets, drove robust growth in Asia-Pacific’s HNWI population and wealth in 2012,” said Jean Lassignardie of Capgemini Global Financial Services.

Despite the large increase in India’s population of high net worth individuals, the lions share of these wealthy investors still live elsewhere, with Germany, Japan and the U.S. accounting for 53 percent of the worlds HNWIs. These countries’ dominance is expected to decline, however, as the emerging markets continue to produce wealthy individuals.

This rebalancing of the world’s wealthy could occur as soon as next year. According to the WWR, “Asia-Pacific is expected to become the largest HNWI wealth market as early as 2014. Asia Markets are expected to expand annually by 10.9% and 9.7% respectively through 2015. HNWI population and wealth reached record levels in Asia-Pacific in 2012, propelling global growth. Since 2007, Asia-Pacific has increased its HNWI population by 31% and its wealth by 27%, well in excess of the rest of the world increases of 14% for HNWI population and 9% for wealth.”

HNWI growth from 2011 to 2012

  • Hong Kong: 35.7 percent
  • India: 22.2 percent
  • Indonesia: 16.8 percent
  • Australia: 15 percent
  • China: 14.3 percent
  • Thailand: 12.7 percent
  • Singapore: 10.3 percent
  • Japan: 4.4 percent

Number of HNWI in India

  • 2008: 84,000
  • 2009: 126,000 (+50 percent)
  • 2010: 153,000 (+21.4 percent)
  • 2011: 125,000 (-18 percent)
  • 2012: 153,000 (+22.4 percent)

Asset Allocation of India’s HNWI

  • Real estate (26.5 percent)
  • Cash and deposits (22.7 percent)
  • Fixed income (17.7 percent)
  • Equities (17.4 percent)
  • Alternative investments (15.8 percent)

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