As 2024 began, there were 756 billionaires in the United States, and they kept getting richer throughout the year.
Despite cumulatively losing $500 billion during the pandemic, they had gained it all back by 2024 and now, just the top 400 (those who make the Forbes list) are worth $4.5 trillion in aggregate. The world, as a whole, is becoming progressively wealthier and most countries have recovered from the slump that resulted from the global pandemic.
UBS, a leading global wealth management firm, has recently published its annual Global Family Office Report, bringing together the insights of 320 single-family offices, which centralize and coordinate various aspects of a wealthy family’s financial affairs using a dedicated team of professionals.
This report, which covers families with an average net worth of $2.6 billion, is the most comprehensive and authoritative analysis of this influential group of investors. UBS also just released its Global Wealth Report, which looks at more than 50 key markets around the world to identify wealth growth, distribution, transfer, inequities, and outlook for the near to mid-term future. Economists like to know where wealth exists to understand how investment — whether for profit, impact or philanthropy — will happen, to plot a likely course for economic growth.
California stands out in these reports because it is the state with the most billionaires at 197, as well as some 1.15 million households with at least $1 million or more to invest. That’s nearly 9% of the state’s households — and they are heavily concentrated in Southern California and the Bay area.
So, what can those who haven’t quite gotten there yet learn from the billionaires and millionaires? What are wealthy investors prioritizing when it comes to finances? And what are their main concerns — major geopolitical conflict, climate change, increased debt and interest rates, or inflation? Here’s an overview of some of the key findings from these two UBS reports:
How Are the Billionaires Allocating Wealth?
In a move to rebalance portfolios and lower risk, many family offices have shifted larger allocations to developed-world, fixed-income vehicles. Some of this may reflect elevated bond yields, but it has been the largest influx in years.
For 2025, family offices expect to sustain these changes but not shift much higher, as inflation and policy rates appear to have peaked in the U.S. (and European Union) and are expected to gradually move lower in a healthier global economy. Given seemingly lower interest rate sensitivity in the United States, almost three-quarters of family offices believe real interest rates will remain positive in the US for longer than in Europe.
What About Real Estate and Private Equity?
Real estate allocations have declined in recent years in the wake of the pandemic, but that is expected to change in 2025. In private equity, overall allocations remain relatively steady with a slight increase in search of greater diversification. More than one-third of family offices plan to add to direct private equity investments and a similar proportion will add to funds or funds of funds. Suggesting they are becoming more optimistic about growth, more than a quarter plan to cut cash allocations.
What Are The Biggest Anxieties?
Family offices are most concerned about the danger of a major geopolitical conflict, in both near and medium terms. Over a five-year horizon, nearly half also view climate change and high debt levels as top concerns, especially as Western countries are burdened by high levels of public debt that may appear to be unsustainable.
For family offices, sustainability is becoming an essential matter of risk and opportunity for both operating businesses and investment portfolios. As sustainability requirements become more specific, partly driven by regulations, family offices want more sophisticated information and advice on sustainable companies.
Healthcare is the top-rated sustainability and impact theme that family offices look to focus on or to better understand, according to 39% of them, followed by clean energy transition at 32%, green climate technology at 30% and education at 28%. These all lend themselves to investors seeking a competitive investment return while simultaneously having the possibility of generating a positive impact on society.
What About Inflation?
Inflation has fallen back from the peak it had reached in 2022 and real growth has exceeded nominal growth slightly. This doesn’t mean that inflation has disappeared — far from it — but the reduction has been enough to push up real growth. Inflation and interest rates are still a concern for the next twelve months but appear to play a less prominent role over the longer term.
Where Are These Wealthy Families Investing?
Family offices appear to be strong believers in American exceptionalism, as U.S. tech companies lead the artificial intelligence revolution and occupy a growing share of global equity markets. AI is the most popular investment theme, with 78% of family offices worldwide and 83% of U.S. family offices indicating it is likely to be an area of investment within the next two years.
This is closely followed globally by health tech at 70%, and then automation and robotics at 67%. On average, family offices have 50% of their portfolios invested in North American asset classes, continuing to build on a multiyear theme of increasing investments in a region resilient to high policy rates and geopolitical risks, while offering the prospect of relieving global labor shortages through AI’s anticipated productivity gains.
Just over a quarter of total allocations are in Western Europe with its market-leading companies in luxury goods and automation. In Asia-Pacific markets including Japan, India and Australia (but not China), assets accounted for 9% of portfolio allocations. Greater China, by itself, accounted for 8%, although that shows regional bias by North Asian and Southeast Asian family offices. By contrast, European and North American family offices have allocated just 2% to Chinese assets. Most intend to increase investments in the North American, Asia-Pacific (excluding greater China) and Western European regions within the next five years.
While currently private equity causes concern for ultra-high-net-worth investors due to its lack of available exits and liquidity, there continues to be confidence in this asset class’s return. An average of 71% say that they invest in private equity to diversify their portfolios, but the same percentage also thinks the long-term returns are likely to be better than in public equities.
What Is Happening with Wealth Mobility?
A substantial share of people in the Global Wealth Report markets do move between wealth brackets in their lifetimes and it is more likely for people to move up the ladder than down it. The likelihood of getting richer tends to decrease over time, however. UBS analysis shows that the longer it takes adults to gain appreciably in wealth, the slower the increase tends to be in future years.
What Does the Future Look Like?
Analysis also shows that $83.5 trillion of wealth will be transferred within the next 20–25 years. UBS estimates $9 trillion of this will be shifted between spouses, the majority in the Americas. Over 10% of the total is likely to be transferred to the next generation by women, since they live longer than men.
Now more than ever there is an abundance of data and information for investors to sort through as they shape their portfolios. Insights from billionaires and family offices around the world can be invaluable as all investors seek opportunities amidst volatile financial markets.
During times of wealth accumulation and generational wealth transfer, working with an experienced, knowledgeable financial advisor can reduce stress, provide clarity, and empower confident decision-making.
Christina Gustin is a principal partner with RKG Wealth Management at UBS, and constructs thoughtful, tailored financial solutions that help individuals and families accomplish their goals.
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