UHNWs Grow Wealth in 2022 Despite Year of ‘Permacrisis’

Four in ten ultra-high-net-worth individuals (UHNWIs) grew their wealth in 2022, despite a year of ‘Permacrisis’, reports Abode2. The drivers of this performance were cited as real estate, currency trades, market timing and, for the first time in more than a decade, the return on cash.

Using data from Knight Frank’s annual Attitudes Survey of more than 500 private bankers, wealth advisors and family offices conducted in November 2022, combined with in-depth conversations with industry experts, the study also reveals that those that saw their wealth shrink, attributed it to equity markets, financial markets more broadly and interest rate moves.

However, with disruption comes opportunity and the study found that more than two thirds of survey respondents expect their clients’ wealth to increase marginally (47%) or significantly (21%) in 2023. With real estate (46%), tech (33%) and equity markets (28%) cited as the top opportunities in 2023 for UHNWIs to create and grow their wealth.

When asked what the top risks in 2023 are for an UHNWI and their ability to create and grow their wealth, the survey found that inflation (67%), interest rates (59%) and political/geopolitical risks (53%) were highest.

With a search for value opportunities the real estate sector is clearly playing a much bigger role. Downward pressure on property values, due to higher interest rates, has created a window for private capital – especially as we enter this new market phase with historic lows in terms of the stock of best-in-class property in residential and commercial markets.