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Investments of passion beat fixed income in super-rich aspirations

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The latest wealth report from estate agents Knight Frank found that the number of people worth USD30 million or more has grown to 172,850 across the world, with close to 5,300 people joining their ranks over 2014 bringing another USD7 billion to the party. 

And it’s quite a party as they control nearly USD22 trillion in assets, more than the national output of the US and Germany combined. And they are going to need a bigger venue, as the research estimates that a third more are waiting to join them, as the numbers are forecast to swell to 230,000.

The survey found that 80 per cent of wealth advisers believe that their existing clients’ net worth will increase in 2015. Over 25 per cent of advisers think their clients are considering buying a house in 2015, and 35 per cent expect their clients to increase their allocations to property investments during the year. 

Beyond property, unsurprisingly, equities are predicted to be the most popular investment class in 2015, with a net balance of 45 per cent of those taking the survey expecting their clients’ exposure to stocks and shares to increase in 2015. 

Outside of the more traditional portfolio construction, investments of passion remain very popular with the super-rich. Globally, 61 per cent of wealth adviser respondents to the Knight Frank survey said their clients were becoming more interested in investing in classic cars, art and wine.

Art is the luxury asset where interest is rising the most,  followed by watches, wine and classic cars. Stamps arouse the least passion around the world, but there is a noticeable geographical difference in Africa and Asia, where 14 per cent and 8 per cent, respectively, of survey respondents noted increasing interest, with China’s respondents coming in at 17 per cent, which matches the recent rise in prices for Asian and Commonwealth stamps.

In terms of the super rich who are happiest with their lifestyles and where they live, Australia came in top, with just 4 per cent considering a move, while roughly a third of those living in Russia and the CIS are considering moving.

Singapore, Hong Kong and New York have the highest density of wealthy, with Singapore coming out on top, but London is the most important city to the super rich. Cities that are seeing an increase in the number of wealthy residents include Belgrade, Serbia; Panama City; Addis Ababa, Ethiopia (Africa’s fastest growing economy) and Yangon in Myanmar

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