As low interest rates and terrible bond yields have driven more everyday people into the stock market in the hopes of protecting their savings from inflation and building their pensions, the market has surged — with the richest people on Earth surfing the wave.
Bloomberg reports on UBS and Campden's annual survey of the rise of "family offices" created by the new class of super-rich (37% of family offices in the survey were created since 2010), some with as many as five offices dotted around the globe.
These offices (about 5,000 of them thought to exist today) are intended to preserve hereditary, dynastic fortunes that ensure that the new breed of financial aristocrats retains its grip on power indefinitely.
Family offices have proven to be a powerful accelerants for huge fortunes: from their modest beginnings of 0.3% returns in 2015, family offices returned 7% in 2016 and 15.5% in 2017.
The pace of new family offices has accelerated especially within the past decade, driven by the rise of Asian wealth, with UBS estimating that a new billionaire is minted in China every two days. Asia is now home to a quarter of the people on Bloomberg's ranking of the world's 500 richest people, second only to North America.
Of the 311 family offices that responded to the latest survey, 37 percent were created after 2010. The average assets held by respondents was $808 million and the average worth of the families was $1.1 billion. Just over 1 in 5 said they have two family office sites, while some have as many as five locations.
Ultra-Rich Families Ride Stocks Surge to Double Annual Gains [Benjamin Stupples/Bloomberg]
(via Naked Capitalism)
(Image: Gerald Ford, CC-BY-SA)