Tue, Mar 22, 2022

US dominates private wealth at $68.8 trillion

The US, China, and Japan are now the top three countries in terms of privately-held wealth, according to the inaugural Henley Global Citizens Report.

The US is the largest wealth market in the world by some margin, accounting for 32% of total global wealth and 36% of the world’s millionaires (high-net-worth-individuals). The total private wealth held in the country currently amounts to $68.8 trillion.

The nationalities showing the greatest appetite for investment migration — whereby wealthy investors acquire an alternative residence or additional citizenship in exchange for making a substantial contribution to the host country — are India, the US, and the UK.

The past two years have seen two big Cs driving wealth and investment migration: Covid and climate change. In 2022, a third C has abruptly emerged: conflict in Europe.

US still dominates the W10

The US is the largest wealth market in the world by some margin, accounting for 32% of total global wealth and 36% of the world’s millionaires (high-net-worth-individuals).

The total private wealth held in the country currently amounts to $68.8 trillion. The US also experienced the greatest high-net-worth population growth of the world’s 10 wealthiest countries by 'total wealth' (the W10) last year, at 10%.

China, while second in the W10, has only a third of the US’s private wealth at $23.3 trillion, and its high-net-worth population grew by a comparatively low 4%.

However, dramatic shifts are on the horizon with the US’s 10-year high-net-worth growth forecast at 20% compared to China’s 50%.

Hot on China’s heels is Japan in third place with a total private wealth of $20.1 trillion. While Japan’s high-net-worth population grew by just 3% last year, its 10-year forecast growth is a healthy 30%. India, Germany, UK, Australia, Canada, France, and finally Italy complete the W10.

Dominic Volek, Group Head of Private Clients at Henley & Partners, says: “It’s no coincidence that each of the W10 countries has legislation in place granting residence rights to foreign investors — and five host formal investment migration programs. These countries are important investment migration markets in terms of both supply, thanks to their attractive and successful programs, and demand, due to their significant and growing populations of affluent investors.”

Indian investors lead investment migration drive

The Henley Global Citizens Report also reveals that Indian nationals topped the charts for enquiries received by the firm in 2021 by a significant margin, with growth of 54% compared to 2020 -- a year which itself saw a 63% rise in interest shown by Indian investors. US citizens were next in line, with Henley & Partners receiving 26% more enquiries in 2021 after astonishing growth of 208% in 2020. Enquiries by Brits and South Africans shot up by 110% and 38%, respectively, in 2021.

Volek says: “The rest of the nationalities in our Top 10 for enquiries in 2021 all come from the global south apart from Canada, in 9th spot, which saw remarkable growth of 86%. In 2022, we are seeing very similar trends, with early signs of exceeding last year’s stellar overall growth. The combination of W10 countries and developing economies that make up our Top 10 reflects the universal appeal of investment migration for affluent families. In addition to the traditional benefits of enhanced global mobility, residence and citizenship by investment programs offer a proven risk mitigation and growth diversification strategy in terms of wealth and legacy planning with the added lifestyle advantage of domicile optionality.”

Geopolitics drives demand in US, UK, and Europe

The northern hemisphere has become increasingly unpredictable over the past two years, contributing towards the high demand for residence and citizenship alternatives.

Mehdi Kadiri, Head of North America at Henley & Partners, says: “The Americas are booming; between 2019 and 2021, Henley & Partners saw a spike of 320% in new enquiries, mainly from US nationals. Demand has predominantly been driven by geopolitical upheaval in the US along with shifting political dynamics in several Latin American countries, as well as the global coronavirus pandemic (and its initial local mismanagement) and the associated travel restrictions and mobility risk.”

Stuart Wakeling, the Head of the firm’s London office, points to the Brexit effect as a growth driver, saying: “UK nationals still top the charts when it comes to the number of enquiries in Europe, with Henley & Partners seeing a 110% increase on 2020’s figures. The vast majority relate to what options Brits now have in terms of alternative residence or additional citizenship in the wake of the UK’s exit from the EU. The biggest growth in Europe, however, comes from Turkey, with a 148% increase in interest, which is why we opened a new office in Istanbul last year.”

Growth in Middle East and Africa

The Middle East and Africa have seen strong surges in investment migration solutions since the outbreak of the pandemic.

Philippe Amarante, Head of the firm’s Dubai office, says: “This applies both to inbound programs such as UAE’s Golden Visa options and outbound in the form of investors securing second or third homes via investment migration-linked real estate. Particular countries of interest in this regard are Greece, Portugal, and Spain. With the outlook for 2022 and related risks and uncertainty on a geopolitical level, the need for additional residence and citizenship options, and the recognition that they are indispensable assets to maintain optionality and access rights, is now widely accepted.”

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