2023-03-20-莱坊-The_Wealth_Report_European_Takeaways_3页_254kb

Wealth Report 2023 Summary

Core Content

The Knight Frank Wealth Report 2023 provides an in-depth analysis of the wealth trends and investment behaviors of ultra-high-net-worth individuals (UHNWIs) across Europe and globally. Despite a significant decline in aggregate wealth for European UHNWIs in 2022, optimism remains high for 2023, with 74% of European UHNWIs expecting an increase in their wealth, compared to the global average of 69%. This optimism is driven by several factors, including real estate, technology, and equity markets.

Wealth Performance in 2022

• Aggregate Wealth Decline: European UHNWIs saw a 17.3% decline in wealth in 2022, higher than the global decline of 10%.
• Wealth Growth by Region:
  • Italy and Spain reported the highest increases in wealth for their UHNW clients, at 36% and 34% respectively.
  • 41% of European wealth advisers noted that their clients' wealth increased in 2022, compared to 24% in the Americas and 40% globally.
• Top Drivers of Wealth Performance:
  • Real estate
  • Currency trades
  • Market timing
• Top Threats to Wealth:
  • Inflation (67% of respondents)
  • Interest rates (58%)
  • Political/geopolitical environment (53%)

Portfolio Configuration

• Primary & Secondary Homes: On average, 32% of European UHNWIs' wealth is allocated to primary and secondary homes. This is significantly higher in Austria (59%) and Italy (42%).
• Commercial Property:
  • Direct ownership: 19% (Europe average)
  • Indirect through funds: 9% (Europe average)
  • Indirect through REITs: 4% (Europe average)
• Bonds: 15% of European UHNWIs' wealth is in bonds.
• Private Equity/Venture Capital: 11% of European UHNWIs' wealth is in private equity/venture capital.
• Investments of Passion:
  • Art (up 29% in 2022)
  • Cars (up 25%)
  • Watches (up 18%)
  • Wine is also a popular investment of passion.
• Crypto Assets: Only 1% of European UHNWIs' wealth is in crypto assets, lower than the global average of 2%.
• Other Investments: 5% of European UHNWIs' wealth is allocated to other categories.

Home Ownership and Preferences

• Average Homes Owned: European UHNWIs own 3.8 homes on average, slightly higher than the global average of 3.7 and higher than the 2.7 in the Americas.
• Home Purchases:
  • 16% of European UHNWIs bought a home in 2022.
  • 15% are planning to buy a home in 2023.
• Motivations for Purchasing:
  • Investment
  • Lifestyle
  • Safe haven
• Overseas Home Ownership: 29% of European UHNWIs own homes overseas, lower than the 35% in the Americas but higher than the 12% in Australasia.
• Preferred Locations:
  • Spain, Italy, France, the US, and Portugal are the top choices for European UHNWs.

Investing Trends

• Private Investors: Accounted for 41% of total commercial real estate investment globally in 2022, with the US investing $455 billion, surpassing institutional investment for the first time.
• Top Sectors for Investment:
  • Hotels & Leisure: 48% (Europe average)
  • Logistics & Industrial: 47% (Europe average)
  • Offices: 46% (Europe average)
• Expected Growth in 2023:
  • Logistics & Industrial: 41%
  • Healthcare: 37%
  • Hotels & Leisure: 37%
• Emerging Sectors: Retirement, agricultural land, and education are expected to see increased interest in 2023.
• ESG Factors: Energy sources, green refurbishments, and embodied carbon footprint are the top ESG considerations for European UHNWIs.

Five Big Themes for 2023

1. The Inflation Question: Inflation will influence central bankers' decisions on interest rates, affecting borrowing costs and asset prices.
2. The Reset: Opportunities to reset investments will arise despite global recessions.
3. Real Assets in the Spotlight: Real estate is seen as a top opportunity for diversification and inflation hedging.
4. Geopolitical Tensions at the Fore: Geopolitical issues will continue to impact sentiment and investment decisions.
5. The Big Three - China, India, and the US: These three countries will have a significant impact on global wealth trends due to their economic dynamics.

Additional Key Information

• Second Passport/Citizenship: 12% of European UHNWIs are planning to apply for a second passport or new citizenship. This is highest in Austria (18%) and Switzerland (12%).
• Wealth Advisers' Insights: European wealth advisers are more optimistic than their global counterparts about wealth growth in 2023.

Conclusion

The 2023 Wealth Report highlights a complex but optimistic landscape for European UHNWIs, with real estate remaining a key asset class and investments of passion continuing to thrive. Despite economic challenges, the ultra-wealthy are actively seeking opportunities to diversify and hedge against inflation, while also considering international mobility and ESG factors in their investment strategies.