The rich grew richer and added more to their numbers last year than at any other point in the past five years, buoyed by strong market conditions and investing in artificial intelligence.

Wealth among those with at least $1 million in investible assets jumped 8.7% to $98.3 trillion by the end of last year led by growth in North America and Asia Pacific, according to the 30th annual report on global wealth from the Capgemini Research Institute.

The number of people considered wealthy also climbed, rising nearly 8% to 25.3 million people last year.

“It’s fairly broad based but it’s largely driven by an increase in AI valuations,” Kartik Ramakrishnan, CEO of Capgemini’s Financial Services Strategic Business Unit, said in an interview.

There’s a widening gap between those at the lower-end of the wealth spectrum and the top. Those with at least $30 million in assets posted the strongest overall gains, with their wealth surging 9.7% and their numbers rising by 9.4% last year. Although representing only 1% of all rich individuals, this elite group holds nearly 35% of total wealth, or about $34.2 trillion.

The “millionaires next door,” those with wealth between $1 million and $5 million, representing nearly 90% of the population of the wealthy, hold only 42.5% of global wealth. Their ranks grew by 7.7%, as their wealth rose 7.8%.

“Part of what you’re seeing with the ultrahigh net worth is that they potentially have access to products that are typically not available to anyone else [such as] specialized private-credit products, access to private markets and to potential IPOs this year, like SpaceX,” Ramakrishnan says.

Capgemini surveyed more than 6,500 wealthy individuals across the Americas, Europe, Asia-Pacific, and the Middle East in January for insights into their investment behavior and preferences and their relationships with wealth managers. The firm uses a market-sizing model to determine the size and growth of wealth across the world.

Last year, the performance of public stock markets had a lot to do with the overall gains, fueled by the world’s wealthiest pouring more money into the sector. Asset allocations to stocks among the rich rose three percentage points to 25% of investment portfolios, Capgemini reported.

There was also a two percentage point uptick in global fixed income allocations to 20%, which aided the wealthy. The Bloomberg Global Aggregate Bond Index returned 8.17% for dollar unhedged investments last year, the best result since 2020. The U.S. Aggregate Bond Index returned 7.3% last year.

The allocation to alternative investments fell by three percentage points to 12%, reflecting more money moving into stocks and bonds. The sector also suffered from the poor performance of buyout funds within private equity (returning just 7%) and cryptocurrency losses, the report said.

Regionally, the biggest wealth gains last year were in North America and Asia-Pacific. In North America, wealth grew nearly 10% and the population of the rich rose 9.1%, benefiting from AI gains. In Canada, gains were also fueled by the effect of surging commodity prices on mining stocks and rate cuts. Wealth in Canada rose by 8.2% as the ranks of the wealthy grew by 6.7%.

Wealth grew by 10.5% in Asia-Pacific last year as the population expanded by 9.4%, also driven by tech growth. South Korea’s equity market led the region last year with a 75.62% jump, pushed higher by results at Samsung Electronics and SK Hynix. Stocks in Taiwan and Japan also soared. In Hong Kong, where the Hang Seng Index rose 27.8%, wealth rose 13.6% and the wealthy population grew by 11.6%.

“We’ve seen Hong Kong open up broadly to the global market a lot more and that is resulting in more wealth,” Ramakrishnan says.

Underlying Capgemini’s annual report this year are warning signs for the wealth management industry. Their research finds that about $1.5 trillion of newly accumulated wealth is moving to new types of wealth firms, including multifamily offices and wealth “tech” firms, that can offer more tailored experiences.

“If you can’t offer personalized advice at scale, the opportunities that firms have to attract a lot of newly minted high-net-worth individuals is lost,” Ramakrishnan says. When they deal with advisors, those with new wealth aren’t just looking for someone to manage their assets. “They are asking them, ‘do you understand my life?’”

Write to Abby Schultz at abby.schultz@barrons.com

The rich grew richer and added more to their numbers last year than at any other point in the past five years, buoyed by strong market conditions and investing in artificial intelligence.

Wealth among those with at least $1 million in investible assets jumped 8.7% to $98.3 trillion by the end of last year led by growth in North America and Asia Pacific, according to the 30th annual report on global wealth from the Capgemini Research Institute.

The number of people considered wealthy also climbed, rising nearly 8% to 25.3 million people last year.

“It’s fairly broad based but it’s largely driven by an increase in AI valuations,” Kartik Ramakrishnan, CEO of Capgemini’s Financial Services Strategic Business Unit, said in an interview.

There’s a widening gap between those at the lower-end of the wealth spectrum and the top. Those with at least $30 million in assets posted the strongest overall gains, with their wealth surging 9.7% and their numbers rising by 9.4% last year. Although representing only 1% of all rich individuals, this elite group holds nearly 35% of total wealth, or about $34.2 trillion.

The “millionaires next door,” those with wealth between $1 million and $5 million, representing nearly 90% of the population of the wealthy, hold only 42.5% of global wealth. Their ranks grew by 7.7%, as their wealth rose 7.8%.

“Part of what you’re seeing with the ultrahigh net worth is that they potentially have access to products that are typically not available to anyone else [such as] specialized private-credit products, access to private markets and to potential IPOs this year, like SpaceX,” Ramakrishnan says.

Capgemini surveyed more than 6,500 wealthy individuals across the Americas, Europe, Asia-Pacific, and the Middle East in January for insights into their investment behavior and preferences and their relationships with wealth managers. The firm uses a market-sizing model to determine the size and growth of wealth across the world.

Last year, the performance of public stock markets had a lot to do with the overall gains, fueled by the world’s wealthiest pouring more money into the sector. Asset allocations to stocks among the rich rose three percentage points to 25% of investment portfolios, Capgemini reported.

There was also a two percentage point uptick in global fixed income allocations to 20%, which aided the wealthy. The Bloomberg Global Aggregate Bond Index returned 8.17% for dollar unhedged investments last year, the best result since 2020. The U.S. Aggregate Bond Index returned 7.3% last year.

The allocation to alternative investments fell by three percentage points to 12%, reflecting more money moving into stocks and bonds. The sector also suffered from the poor performance of buyout funds within private equity (returning just 7%) and cryptocurrency losses, the report said.

Regionally, the biggest wealth gains last year were in North America and Asia-Pacific. In North America, wealth grew nearly 10% and the population of the rich rose 9.1%, benefiting from AI gains. In Canada, gains were also fueled by the effect of surging commodity prices on mining stocks and rate cuts. Wealth in Canada rose by 8.2% as the ranks of the wealthy grew by 6.7%.

Wealth grew by 10.5% in Asia-Pacific last year as the population expanded by 9.4%, also driven by tech growth. South Korea’s equity market led the region last year with a 75.62% jump, pushed higher by results at Samsung Electronics and SK Hynix. Stocks in Taiwan and Japan also soared. In Hong Kong, where the Hang Seng Index rose 27.8%, wealth rose 13.6% and the wealthy population grew by 11.6%.

“We’ve seen Hong Kong open up broadly to the global market a lot more and that is resulting in more wealth,” Ramakrishnan says.

Underlying Capgemini’s annual report this year are warning signs for the wealth management industry. Their research finds that about $1.5 trillion of newly accumulated wealth is moving to new types of wealth firms, including multifamily offices and wealth “tech” firms, that can offer more tailored experiences.

“If you can’t offer personalized advice at scale, the opportunities that firms have to attract a lot of newly minted high-net-worth individuals is lost,” Ramakrishnan says. When they deal with advisors, those with new wealth aren’t just looking for someone to manage their assets. “They are asking them, ‘do you understand my life?’”

Write to Abby Schultz at abby.schultz@barrons.com