Heirs beat self-made billionaires for first time in UBS survey

UBS Group said heirs joining the ranks of the world's richest over the past year had racked up more wealth than newly-minted self-made billionaires, in a sign that the transfer of family fortunes is becoming an ever-larger factor in the distribution wealth.

Of the 137 people who became billionaires last year, 53 inherited fortunes amounting to a combined $150.8 billion, according to a study published on Thursday. While self-made billionaires outnumbered them, the 84 individuals who joined the list had accumulated just $140.7 billion. That was the first time since UBS started compiling the report nine years ago that new billionaires inherited more wealth than they created.

The results add to evidence of a historic shift, as the billionaire entrepreneurs who for three decades benefited from the tech boom, financial market expansion, real estate bull market and growth in emerging economies prepare to hand over their fortunes. Over the next 20 to 30 years, UBS said more than 1,000 billionaires are expected to pass on an estimated $5.2 trillion to the next generation.

"This great wealth handover has long been anticipated," but it's now "underway and gathering momentum," UBS wrote in the report.

While entrepreneurs still dominate the top ranks of the Bloomberg Billionaires Index, many are nearing the age were they think about succession. In China, a new wave of billionaire heirs is stepping up at their families' companies. In Europe, Mark Mateschitz became the region's richest millennial this year after inheriting a 49% stake in the world's largest energy-drink company, Red Bull.

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The looming wealth transfer is "the biggest opportunity for a firm like UBS," said Benjamin Cavalli, head of global wealth management strategic clients at the lender.

Globally, the number of billionaires rose 7% from a year earlier, though the community of the richest remains smaller than at the peak in 2021, UBS said. The report is based on data compiled by UBS and PwC and covers the 12 months to April 6. 

UBS also surveyed its own clients for the study, with 79 responding over the summer. The poll showed first generation billionaires are more concerned about geopolitical risks and a potential recession in the U.S., while later generations cite the inflation outlook as the main risk to their businesses. Most agreed on AI as "one of the greatest commercial opportunities," the report said.