World wealth down 11%, fewer millionaires: report

World wealth down 11%, fewer millionaires: report
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First Published: Tue, Sep 15 2009. 12 46 PM IST
Updated: Tue, Sep 15 2009. 12 46 PM IST
New York : The 2008 global recession caused the first worldwide contraction in assets under management in nearly a decade, according to a study that found wealth dropped 11.7% to $92.4 trillion.
A return to 2007 levels of wealth will take six years, according to a Boston Consulting Group study that examined assets overseen by the asset management industry.
North America, particularly the United States, was the hardest hit region, reporting a 21.8% decline in wealth firms’ assets under management to $29.3 trillion, primarily because of the beating US equities investments took in 2008.
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Also hit hard were off-shore wealth centers, like Switzerland and the Caribbean, where assets declined to $6.7 trillion in 2008 from $7.3 trillion in 2007, an 8% drop.
The downturn has “shattered confidence in a way we have not seen in a long time,” said Bruce Holley, senior partner and managing director at BCG’s New York office.
The study forecasts that wealth management firms’ assets under management will not return to 2007 levels, $108.5 trillion, until 2013, a six-year rebound.
Europe posted a slightly higher $32.7 trillion of assets under management, edging out North America for the wealthiest region, though the total wealth in region dropped 5.8%.
Latin America was the only region to report a gain in assets under management, posting a 3% uptick from $2.4 trillion in 2007 to $2.5 trillion in 2008.
Millionaire ... not
The economy’s retreat also pounded millionaires who made risky investments during the economic boom.
The number of millionaires worldwide shrank 17.8% to 9 million, the BCG study found.
Europe and North America were hardest hit in that regard, posting 22% declines. The United States still boasts 3.9 million millionaires, the highest population on the globe.
Singapore had the highest density of millionaires at 8.5% of the population. Other countries included Switzerland, at 6.6%, Kuwait, at 5.1%, United Arab Emirates, at 4.5%, and the United States, at 3.5%.
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First Published: Tue, Sep 15 2009. 12 46 PM IST
More Topics: Wealth | Recession | Millionaires | Slowdown | Economy |