Inheritance more lucrative for new billionaires than working for themselves
Published: Thursday, Nov 30th 2023, 09:30
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Last year, 137 people around the world joined the exclusive circle of billionaires. Their wealth amounts to a total of 291.5 billion US dollars. The majority of these new billionaires earned the money themselves, but for the first time the amount of money they inherited exceeds the wealth they earned themselves.
150.8 billion US dollars were handed over to 53 heirs, who can now count themselves among the billionaires. The 84 new self-made billionaires have a total wealth of 140.7 billion dollars. This means that for the first time since the study began in 2015, the super-rich have acquired more wealth through inheritance than through entrepreneurship, according to the "UBS Billionaire Ambitions Report 2023" published on Thursday.
This suggests that "the great transfer of wealth" is gaining momentum. And "a new cohort of multi-generational families is emerging, in which each generation has its own ideas about its inheritance and ambitions", the study says.
The authors also assume that over 1,000 of today's billionaires will transfer a fortune of more than 5.2 trillion US dollars to their heirs in the next 20 to 30 years. To come up with this estimate, the authors of the study added up the wealth of the 1023 billionaires who are currently 70 years old or older.
"In the longer term, the extraordinary wealth resulting from the boom in entrepreneurial activity since the 1990s has created a foundation for future generations of billionaire families," it says.
IPOs make billionaires
Among self-made billionaires, i.e. those of the first generation, two thirds have joined the ranks of the super-rich thanks to the organic growth of their company. One in five has also broken the billion-dollar mark thanks to an IPO, and in the Asia-Pacific region it is one in three.
Mergers and acquisitions were another important "gateway to the billionaire universe". Although they were rare according to the study, they proved to be "particularly disruptive".
In other words, they allowed company owners to make the biggest leap in wealth. Entrepreneurs who became new billionaires in this way had an average fortune of 4.2 billion US dollars. Those who built up their wealth through organic company growth "only" had 1.4 billion.
Recovery after the pandemic
According to the report, some entrepreneurs returned to the group of billionaires after losing wealth during coronavirus. In particular, the wealth of European retailers and consumer goods manufacturers has partially recovered after falling by almost a fifth in the previous year.
All in all, the number of billionaires worldwide rose by 7 percent to 2544. Their total wealth increased by 9 percent to 12 trillion Swiss francs. According to the "Bilanz" list of the richest Swiss, which was published a few days ago, there are around 150 billionaires or families in Switzerland with assets of over CHF 1 billion.
©Keystone/SDA
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