UAE sees 6% increase in millionaires in 2016

The UAE saw a 5.9 per cent increase in millionaire households last year following strong growth in the private wealth held in the country, according to a new report

Boston Consulting Group’s (BCG) Global Wealth 2017 report found that private wealth in the UAE grew 8.3 per cent last year, driven by a 9.3 per cent in wealth held in equities, 8.4 increase in cash in deposits and 3.8 per cent increase in bonds.

The consultancy forecast UAE wealth would lead the GCC at a compound annual growth rate (CAGR) of 7.4 per cent in the next five years with cash deposits at a 5.5 CAGR and bonds at a 3.6 per cent CAGR the primary contributors.

In the wider results, BCG found that ultra high net worth individuals with more than $100m saw an 8.8 per cent increase in wealth in the UAE last year, with a CAGR of 9.4 per cent expected to 2021.

Those in the $20m to $100m bracket saw wealth increase 11.2 per cent with a CAGR of 9.9 per cent expected to 2021 and the $1m to $50m segment saw growth of 10.5 per cent with a CAGR of 8.8 per cent expected over the next five years.

Over the same period the UAE’s number of millionaire households is expected to grow at a CAGR of 4.8 per cent.

Switzerland remained the most popular destination for Middle East an Africa offshore wealth last year, accounting for 31 per cent and projected to grow at a CAGR of 4.7 per cent to 2021.

The UK/Channel Islands came second at 23 per cent and a CAGR of 5 per cent followed by Dubai at 18 per cent with a CAGR of 4.5 per cent.

Private wealth in the Middle East and North Africa is forecast to reach $12 trillion over the next five years with the UAE, Oman, Qatar and Saudi Arabia accounting for 21.1 per cent.

“In the Middle East and Africa (MEA), wealth expansion should stem, in relatively equal portions, from existing assets and higher household savings,” said Markus Massi, senior partner and managing director of BCG Middle East’s financial services practice.

“Looking ahead, the share of wealth allocated to each asset class is expected to remain stable, with regional wealth projected to rise at an annual rate of roughly 8 percent through 2021. In the coming years, more local players will enter the wealth management market as traditional revenue pools become more competitive.”

Globally, private wealth grew 5.3 per cent last year to $165.5 trillion, BCG said, from 4.4 per cent in 2015.

The firm forecast private wealth in Asia Pacific would overtake Western Europe by the end of the year after growing 9.5 per cent in 2016 compared to the latter’s 3.2 per cent.

By 2019 the combined wealth in Asia Pacific and Japan is projected to surpass North America.