Many of the World’s Wealthiest People Are Getting Older—and Plotting What’s Next
Lorenzo Servitje Sendra was the oldest person on the Bloomberg Billionaires Index when he died last month with a $4.2 billion fortune.
Thinking ahead, the Mexican billionaire had already transferred his stake in Grupo Bimbo, the world’s largest breadmaker, to his heirs, enabling them to sidestep what amounts to a $2.1 trillion headache for the wealthy. That’s the total net worth — roughly equal to the gross domestic product of India — controlled by the 218 billionaires over age 70 on the Bloomberg index, a daily ranking of the world’s 500 richest people.
“By far the biggest handover ever to the next generation is about to happen,” PWC and UBS noted in a 2016 report on billionaires. “Without careful planning, many of today’s fortunes will suffer substantial erosion.”
The problem is most acute in the U.S. and Europe, where about a quarter of the billionaires on the index are age 80 or older, compared to 20 percent in Asia.
In mainland China, where only chemical maker Xu Chuanhua has reached that milestone, just 3 percent of the wealth is in the hands of the elderly, with about 40 percent held by billionaires under age 50.
Russians have their own version of the headache, with private wealth controlled mostly by a generation of businessmen who profited from the chaotic post-Soviet economy. For those billionaires, passing the business on isn’t an option when so much of the value is tightly woven into personal connections at the Kremlin.
In the U.S., Sumner Redstone’s $3.8 billion fortune became embroiled in a bitter and public feud when the 93-year-old’s frail health sparked a legal battle between his daughter Shari Redstone and Viacom Inc.’s former Chief Executive Officer Philippe Dauman, hobbling the media company’s efforts to make deals to stream programs on the internet.
Italian billionaire Leonardo Del Vecchio, 81, sold Luxottica Group SpA, the eyewear business that makes up the bulk of his $18 billion fortune, to Essilor International SA in January. That was to prevent a tug-of-war among his children for control of Luxottica as Del Vecchio looks to transfer his wealth to the next generation.
Then there is the Buffett approach. The 86-year-old Berkshire Hathaway Inc. chairman is the world’s second-richest person and has pledged to give almost all of his $79 billion fortune to charity, a move that’s been followed by 156 of the world’s richest people, including No. 1, Bill Gates.
—With assistance from Jack Witzig and Blake Schmidt.