Ultra-high-net-worth individuals, or UHNWI, experienced a significant decline in population—the biggest since 2015.
Being an ultra-high-net-worth individual (UHNI) is like having your castle in the sky. Being a UHNI puts a person in an echelon that cannot easily be reached. To be part of the palace in the sky, a UNHI person should have at least $30 Million in net worth. People who are categorized as UNHI are considered the wealthiest people in the world—they have massive amounts of money at their disposal.
People in such echelon are known to be invincible. Having such kind of monetary prowess sets you up for life—enabling you to have anything you need, want, and everything in between in an instant. However, ALTRATA reported a decline in the ultra-high net worth (UHNW) population—shattering the idea of financial invincibility amongst the class.
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Surprising Changes
In the recent World Ultra Wealth Report 2023 by ALTRATA, the number of UNHWI per country and continent decreased. Furthermore, the intelligence company reports that the global UHNW population fell by 5.4% to 395,070 individuals. The decline may signify the end of an era since it is considered the first annual decline in four years and the contraction since 2015.
The most significant region that experienced the decline is Asia. Furthermore, Asia’s ultra-wealthy population fell by 11% in 2022—reducing the number of UHNWI to 108,370 individuals. Aside from Asia, Europe also experienced a huge drop in UNHWI population. The continent that is known as the birthplace of multiple luxury brands experienced a 7.1% decline in the UNHWI population. The decline reduced the population of UNHWI in Europe to 100,850.
The report isn’t all bad, some regions experienced an increase in the UNHWI population. These regions are the Middle East, Latin America, and the Caribbean. Moreover, as per the report, the Middle East registered strong gains in ultra-wealthy individuals and total net worth. The UNHWI population increasing to 15.7% also means that 21,640 people are now considered ultra-high-net-worth individuals. On the other hand, the Latin America and Caribbean region experienced a rise of 17.5% in UHNWI numbers. The population of 11,560 individuals was the strongest of any region.
Driving Forces
There are multiple reasons why these changes happened and are currently happening. “China’s strict Covid lockdown, the fallout from the war in Ukraine, disrupted the regional supply chain, and depressed stocks all played a role,” the report says. Asian asset markets have been volatile and conditions have tightened as a result of regional banks’ actions to support under-pressure currencies. However, it is notable that an Asian country, India, is the only country in the Top 10 that did not experience any decline.
“Whether by chance or design, the turbulent backdrop of 2022 provided wealth-creation opportunities for some among the ultra-wealthy class,” Manuel Bianchi, head of global sales for Altrata said. All is not lost as per the report, the world economy showed resilience over the first half of 2023. With Europe avoiding a predicted deep recession, and US and Chinese consumer activity being stronger than anticipated.
Banner photo by Mushtaq Hussain via Pexels.
