The number of Asians with at least $100 million in disposable assets overtook North America’s tally for the first time as the world’s “economic center of gravity” continued moving east, Citigroup Inc.’s private bank said.
There were 18,000 “centa-millionaires” in Southeast Asia, China and Japan at the end of 2011, compared with 17,000 in North America and 14,000 in Western Europe, the bank said today in The Wealth Report 2012, published in partnership with Knight Frank LLP.
The world economy’s center of gravity has moved from the middle of the Atlantic Ocean in 1980 to a point near the Suez Canal today, the report said, citing calculations by Danny Quah of the London School of Economics. The International Monetary Fund in January cut its forecast for 2012 global growth to 3.3 percent, while saying the 27 countries of developing Asia may grow by 7.3 percent.
“The number and concentration of centa-millionaires accentuates the trajectory of current global wealth flows,” James Lawson, director at Ledbury Research, said in the report. “Trends seen in this wealth bracket are likely to be replicated in lower wealth tiers in years to come.”
Li Ka-Shing, Asia’s richest man, had a net worth of about $24.8 billion yesterday, according to the Bloomberg Billionaires Index ranking the world’s 20 wealthiest individuals. Mukesh Ambani, chairman and managing director of India’s Reliance Industries Ltd., ranked second with $23.6 billion.
Art, Wine, Sports
The shift of wealth to the east may fuel investment in art, wine and sports from Asia, according to the report. Greater interest in art investments was expressed last year by a net 32 percent of the region’s holders of more than $25 million, and interest in wine rose 29 percent.
“When it comes to investments of passion, it seems that Asia-Pacific could be the region to watch,” the report said. “At a time of turmoil in the markets, art, wine and sport look like steady investments, routinely outperforming indices such as the FTSE 100.”
Valuations of the Indian Premier League, the country’s domestic cricket franchise, also show increased interest in sports, the report says.
When the first eight IPL teams were sold in 2007, to businessmen including Ambani and Bollywood actor Shah Rukh Khan, they raised a combined $750 million, according to the report. When two additional teams joined in 2011, they brought in a total of more than $700 million.
Fernandes Buys QPR
Other Asians investing in sport include Tony Fernandes, chief executive officer of Malaysia’s AirAsia Bhd., who bought a 66 percent stake in English soccer’s Premier League club Queens Park Rangers in August. He is also involved in Formula One as the head of Team Lotus.
China will pass the U.S. to become the largest economy by 2020 and will be overtaken by India in 2050, according to Citigroup research in the report.
In 2010, the number of centa-millionaires in Southeast Asia, China and Japan was 16,000, the same as in North America, and ahead of 13,000 in Western Europe, Grainne Gilmore, head of U.K. residential research at Knight Frank, said in a telephone interview from London on March 26. Asia’s tally will rise to 26,000 in 2016, followed by 21,000 in North America and 15,000 in Western Europe, the report predicts.
There’s a wide wealth disparity in countries such as India and China where the absolute number of millionaires is large, Debashish Duttagupta, head of investment for Asia-Pacific wealth management at Citigroup, said in a Bloomberg Television interview in Hong Kong today. As a percentage of the population, the wealthy are a small fraction in these countries, he said.
“Which is why Asia is likely to remain one of the strongest growing wealth regions in the world for some time to come,” he said.