Global wealth grew 7.8% In 2012, driven by Developing economies

Two hundred and ten people made their debut on Forbes’ annual billionaires list this March, bringing the total to a record 1,426 individuals.

Collectively, the world’s billionaires controlled $5.4 trillion of wealth, an all time high, up from $4.6 trillion the year before. But the average billionaire’s net worth rose by just 2.7% year over year, from $3.7 billion to $3.8 billion, suggesting that though the cohort is rapidly expanding, the average billionaire did not get substantially wealthier last year.

According to The Boston Consulting Group’s 13th annual Global Wealth Report, issued Thursday afternoon, the world as a whole fared measurably better than the average billionaire. BCG found that global private financial wealth grew at the impressive clip of 7.8% in 2012, besting the 7.3% and 3.6% expansion logged in 2010 and 2011, respectively.


That 2012 was the best year in recent memory should not shock anyone who kept an eye on the markets. The S&P 500 produced a total return of 16% last year. As such, BCG found that “the principal driver of the rise in wealth was the strong rebound in equity markets.” The effect was particularly pronounced in the mature economies of what BCG calls the “old world”, where $3.9 trillion of the $5.3 trillion in total wealth generated in 2012 came from the appreciation of existing assets.


In the developing economies of BCG’s “new world”, however, the phenomenon was inverted, with newly created wealth accounting for 55.6% of total wealth growth. At $2.5 trillion, the newly created wealth in these economies was also greater in nominal terms than the $1.4 trillion of newly created wealth in the “old world”. This was the result of another year of strong GDP growth in the developing world, where the collective economy expanded 10.1%. In comparison, North America, Western Europe and Japan’s collective GDP grew by just 2.3% on the year.


Continued double digit GDP growth, a rising savings rate and soaring equity markets fueled a 12.9% increase in private financial wealth in the developing world last year, while the total private wealth growth rate of the “old world” lagged the world as a whole, rising 5.9% on the year. If this trend continues, the Asia-Pacific region will be home to a projected $48.1 trillion in wealth by 2017, making it the wealthiest region in the world. North America currently holds that title with $43.3 trillion, $15.3 trillion more than the Asia-Pacific region, but that figure is projected to rise to just $48 trillion by 2017.


For the time being, the United States is still home to more wealthy individuals than any other nation, with 5,876,000 millionaire households. Japan comes in a distant second at 1,460,000. The U.S. also leads the way when it comes to ultra high net worth households with more than $100 million in private financial wealth, with 3,016 such households. The U.K. falls in second place with 1,001. China lies in wait in third place on both lists, with 1,304,000 millionaire households and 851 ultra high net worth households. If the West continues to rely on existing assets for wealth growth, it won’t be long until China leads the world in both categories.