Out-Law News 1 min. read

Africans set to ‘surge’ up rankings of ultra-high-net-worth individuals over next decade


The number of ultra-high net worth individuals (UHNWIs) in Africa, those with at least $30 million in assets, is expected to rise by a “staggering” 59% over the next 10 years, according to a report.

The 2015 edition of The Wealth Report, launched in South Africa by Knight Frank and Standard Bank Group Wealth and Investment, said the projected increase in UHNWIs will be “stronger than the 34% projected global growth”.

Report editor Andrew Shirley said research showed “the increasing influence of global and African wealth flows on prime property and investment markets”.

Shirley said Johannesburg “stands out as the most important African city after ranking as the 28th most important city for UHNWIs and Cape Town the 36th”.

According to the report, the total number of UHNWIs increased by almost 5,200 (3%) in 2014. “While so-called investments of passion, such as art, wine and classic cars continue to attract interest, property remains the cornerstone of many investment strategies as it accounts for almost a third of all UHNWIs’ portfolios”, the report said.

"UHNWIs are adopting increasingly sophisticated investment strategies, and sometimes this approach involves the kind of active management previously restricted to institutions and funds,” the report said.

The global chief executive of Standard Bank Group wealth and investment Margaret Nienaber said: “The market is evolving and we are foreseeing positive future growth in key African countries like Nigeria, which has one of the strongest forecast growth rates in high-net-worth individuals over the coming decade.”

The research findings put the growth of Nigeria’s UHNWIs by 2024 at 90%, but said “the top spot for Africa is reserved for the Ivory Coast at 119%”.

Nienaber said: “Africa is one of the regions of the world with huge potential to grow its wealth, driven by a rising middle class and the increased success of many businesses. Importantly, reforms in many countries are being expedited, infrastructure is happening at a startling pace and foreign investors are noticing.”

“The wealth space in Africa is going to be extremely exciting over the next decade,” Nienaber said. “It is a reflection of the ongoing interest in the continent as a destination for investors and businesses and the pace of wealth generation will increase exponentially as this trend continues.”

Last February, fund manager Stanlib’s regional director for East Africa, James Muratha, said collective investment schemes in Kenya rose by 20% between 2012 and 2013, from the equivalent of nearly $349m in 2012 to almost $420m in 2013.

Muratha said the Central Bank of Kenya central depository and settlement (CDS) accounts for government securities increased 27% in the last two years, from 14,056 to 17,795. “There has also been tremendous growth in the number of equities CDS accounts within the same period,” Muratha said. “This goes to show how interest is building for investing.”

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