Private wealth in Asia-Pacific exceeds North America's

ZURICH • Private wealth in the Asia-Pacific region surpassed that of North America for the first time last year, fuelled by stronger economies and real estate markets, according to a Cap Gemini report.

Millionaires' assets in Asia-Pacific countries surged almost 10 per cent to US$17.4 trillion (S$23.3 trillion), outstripping North America's US$16.6 trillion, Cap Gemini said yesterday.

European wealth rose 4.8 per cent to US$13.6 trillion, while Latin America and Africa declined, the Paris-based consulting firm said. Global wealth advanced 4 per cent to US$58.7 trillion.

China's millionaire population rose 16 per cent, the biggest increase in the survey.

The United States, Japan and Germany still have more high-net-worth individuals, though, and there are more than four times the number of American millionaires than Chinese ones.

China, the US and India are expected to be the key drivers of growth in high-net-worth individuals' assets to 2025, by which time millionaires globally will have US$106 trillion, according to the report. Wealth in the Asia-Pacific will climb 142 per cent to US$42.1 trillion, while the Middle East and Africa will be the two other fastest-growing areas, it said.

Wealthy bank clients in Switzerland are diverting more of their cash to investments such as hedge funds and private equity to counter negative interest rates.

Cap Gemini surveyed more than 800 wealth-management companies across 15 major wealth markets to compile its report. A high-net-worth individual is defined as someone with investable assets of US$1 million or more, excluding his primary residence and certain collectibles and consumer items, it said.

It also found that wealthy bank clients in Switzerland are diverting more of their cash to investments such as hedge funds and private equity to counter negative interest rates.

The annual world wealth report said high-net-worth individuals in Switzerland kept 21.4 per cent of their assets in cash and cash equivalents in the first quarter of this year, down from 28.2 per cent last year.

"Because clients are not receiving any interest, they're looking for alternative investment opportunities," said Mr Tobias Wolf, senior manager at Capgemini Consulting.

The Swiss National Bank has pushed interest rates to record lows since January last year in an effort to weaken the Swiss franc. It now charges banks 0.75 per cent on some deposits.

With the exception of Alternative Bank Switzerland, Swiss lenders have not yet passed on negative rates to retail customers, but some have introduced deposit charges for cash-heavy corporate, private and institutional clients.

Switzerland's biggest bank, UBS, could pass on negative rates to wealthy private customers or add new service fees to safeguard profitability and capital returns, its chief executive said last month.

REUTERS

A version of this article appeared in the print edition of The Straits Times on June 24, 2016, with the headline 'Private wealth in Asia-Pacific exceeds N. America's'. Print Edition | Subscribe