Report Projects $2.1 Trillion Global Wealth Transfer Over Twenty Years

Report Projects $2.1 Trillion Global Wealth Transfer Over Twenty Years

A global wealth transfer totaling $2.1 trillion will take place over the next twenty years, and emerging philanthropic models will come to the fore as millennials embrace philanthropy as a core value, a report from UBS Group and PwC finds.

The report, Billionaires Insights: Are Billionaires Feeling the Pressure? (28 pages, PDF), found that total wealth among the 460 billionaires it examined fell by $300 billion, to $5.1 trillion, in 2015 — due in part to the transfer of assets within families, commodity price deflation, and a stronger U.S. dollar. The report also found that for the first time in ten years, the average wealth ($4.5 billion) of self-made billionaires in the U.S. surpassed the average wealth of those with inherited fortunes ($4.3 billion).

According to the report, two decades of unprecedented wealth creation is about to result in the largest wealth transfer in human history, accompanied by new models of philanthropy and the emergence of millennials as a philanthropic force — in part because millennials tend to have a more global outlook and broader set of values than their parents and grandparents. At the same time, while many millennials who inherit the wealth of their billionaire parents are entrepreneurial and keen to develop their own role in the family business, they also tend to be focused on "doing good by doing well" and see business success as a way of benefiting society.

The report notes that while new philanthropic models such as loans, guarantees, social impact contracts, and impact investing are spreading, young philanthropists of this Second Gilded Age would be well advised to have a focused philanthropic strategy aligned with  impact measurement, take "smart" risks (providing risk capital with a long-term view), embrace collaboration, and adopt flexible, cross-sectoral approaches to the problems they are looking to address.