Billionaire Inheritance Surpasses Entrepreneurship in Wealth Accumulation, UBS Reports

In a groundbreaking shift observed by UBS, the world’s wealthiest individuals are now more likely to have inherited their riches rather than accumulated them through entrepreneurship. This is the first instance of such a trend since UBS began monitoring the fortunes of global billionaires nearly a decade ago.

According to the Swiss banking giant’s latest report, billionaire heirs are increasingly directing their focus towards critical global economic issues, investing in sectors like clean energy and artificial intelligence. This shift in wealth distribution is part of a broader trend dubbed “the great wealth transfer.” Benjamin Cavalli of UBS’s Global Wealth Management unit highlights the significance of this transfer, with an estimated $5.2 trillion expected to be passed down to the next generation of over 1,000 billionaires.

UBS, serving half of the world’s billionaires, noted that in the 12 months leading up to April, $150.8 billion was inherited by 53 heirs, surpassing the $140.7 billion amassed by 84 new self-made billionaires. This marks a notable increase in the global billionaire population, which rose 7% to 2,544. Their collective wealth grew by 9% to $12 trillion, although this figure still falls short of the 2021 peak of $13.4 trillion.

The 2021 surge in billionaire wealth was fueled by a post-pandemic rally in assets like stocks and property. However, the latest UBS report also sheds light on the subdued state of the IPO market through 2022 and early 2023, which has limited wealth generation opportunities for entrepreneurs. Max Kunkel of UBS points out that economic, geopolitical, and policy uncertainties have recently posed significant challenges to the creation of entrepreneurial wealth.