UBS: Europe, the home of old money, ceases to create new billionaires but remains a leader in wealth preservation

Sorin Melenciuc 26/10/2018 | 14:37

Europe is the home of old money and has ceased to create new billionaires as its billionaire population was static in 2016 but remains a leader in wealth preservation, according to the report “New value creators gain momentum. Billionaires insights 2017” released by UBS and PwC, consulted by Business Review.

“Billionaire wealth grew only slightly in Europe, the home of old money,” the report indicates.

From the number of billionaires’ perspective, the world has entered “The Asian Century”: in 2016 alone, the number of Asian billionaires rose by 117 (23 percent) to 637.

By contrast, there were just 25 more (+5 percent) US billionaires at 563. Europe’s billionaire population was flat.

“With neither the dynamism of emerging countries, nor the entrepreneurialism of the United States. Europe’s billionaire population was static in 2016. Twenty-four entered this wealth band, while 21 dropped off. There were 342 European billionaires at the end of 2016,” the report says.

According to the authors, 2016 was an uncertain year for Europe politically as Brexit and the possibility of similar election upsets in Italy, the Netherlands, France and Germany undermined sentiment.

However, Europe remains a leader in wealth preservation despite the fact that its billionaire population is relatively static.

“Just 21 of 2016’s drop-offs were from the continent and more than a third of them (8) left the list due to death. This corresponds with our finding in previous years that Europe had the highest number of multigenerational billionaires,” the report points out.

The authors of the study explain that entrepreneurial companies can find Europe a difficult place to do business due to both the conservative business culture and strict regulations.

“For example, the EU has taken a tough stance against perceived monopolistic practices by technology firms such as Google,” the report shows.

Moreover, a third of Europe’s billionaires are linked to businesses in the “old economy” consumer and retail sector – including luxury goods, discount retailing and fashion.

“in Europe, where many billionaire-linked businesses were started in the post-war years, is there a roughly equal split between self-made and multigenerational wealth,” according to the report.

The fortunes of Europe’s billionaires are closely intertwined with its countries’ economies. Germany, the largest economy, also has most billionaires, at 117. The UK comes a distant second, at 55, followed by Italy (42), France (39) and Switzerland (35).

The home of new money is now Asia, according to UBS and PwC.

“In a landmark year, the number of Asian billionaires on our database exceeded US billionaires for the first time. Yet, Asian billionaires’ wealth still lags US billionaires,” the report indicates.

The US still retains the greatest amount of billionaire wealth as the wealthiest individuals live there.

the report does not include data about Romanian billionaires but according to most local reports Romania ghas only two billionaires in euros or US dolars.

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