The growth in ultra-wealthy populations in Africa will outpace that of Europe and North America over the next decade, according to the 2017 edition of The Wealth Report launched in Africa by Knight Frank and Standard Bank Wealth and Investment.
The findings show that over the next decade Africa’s number of ultra-high-net-worth individuals will grow by 33%, after suffering a decline of 2% in 2015-16 due to tough market conditions.
Hotspots for growth include Ghana, Mauritius, Ethiopia, Tanzania, Uganda, Kenya, and Rwanda. The survey also shows that the majority of investors still feel under-invested in property and are looking to rebalance overall portfolios. Respondents’ preferred locations varied considerably depending on their domicile, with Australia, Africa and the US all cited as investment targets for 2017.
Deon de Klerk, Head of Wealth: Africa Regions for Standard Bank, says it is increasingly important that individuals’ goals, requirements, time horizons, lifestyles and tolerance for risk are well understood and managed early.
Preservation of capital and generational wealth transfer considerations remain critical to an effective overall wealth strategy.
“There is little doubt that uncertainty prevails and wealthy investors are becoming increasingly concerned about their short-term wealth prospects. However, it is important not to panic and to rely on a goals-driven approach to successfully navigate the environment,” says de Klerk.
The total number of global ultra-wealthy - those with $30m or more in net assets – rose by 6,340 in 2016, taking the total to 193,490, according to the report. What’s more countries offering fiscal and political stability, as well as excellent quality of life, are expected to see strong growth over the next decade.
“It is imperative for countries in Africa to position themselves for attracting new business and investment to boost economic growth and improve financial inclusion. Therefore, while the ultra-wealthy in Africa only grew by 13% between 2006 and 2016, growth could be more than double that rate over the next decade as policy and regulatory frameworks make countries more conducive for doing business and creating prosperity,” says de Klerk.
Standard Bank Wealth and Investment is an advice led business with more than $12 billion in assets under management worldwide. Due to its reach in to 20 African countries and on-the-ground expertise the bank is seen as a key partner for Knight Frank in delivering an unbiased view on the key trends underpinning the wealth market across Africa.
The level of complexity within markets has heightened risks, ushering in the need for specific expertise across a broad spectrum, from investment specialisation and system sophistication to the management of endowments, retirement funds and institutional mandates, among others. At the same time, absolute discretion and confidentiality are crucial.
The ultra-wealthy in Africa are also increasingly interested in leaving a legacy and providing more for society at large through philanthropic activities.
“A thorough understanding of each family’s quantum of available wealth to preserve for the sake of maintaining their lifestyle is required, so that legacy and philanthropic activities can be undertaken with higher levels of confidence. There is a definite move in Africa to give back to society due to the limited resources available to the poor. This is why a comprehensive and tailored solutions are so important,” says de Klerk.
Standard Bank Wealth and Investment’s extensive presence throughout Africa, including South Africa, Nigeria, Kenya and Ghana as well as in London, Jersey and Mauritius, combined with the Standard Bank Group’s heritage of over 154 years, empowers the Bank with the diversification needed to provide seamless on- and offshore offerings. These capabilities have led to the recognition of Standard Bank Wealth and Investment as the leading wealth manager in Africa, a position supported by a number of continent-wide industry accolades including, amongst others, Africa’s Best Bank for Wealth Management by Euromoney.
Standard Bank Wealth and Investment is also Nigeria’s largest Pension Fund administrator and Asset Manager, and in the UK the Jersey business was recognised as the Best International Structured Product Provider in the 2016 UK International Fund and Products awards.
“Standard Bank is well positioned to deliver bespoke wealth management and banking solutions seamlessly, whether onshore or offshore. Our approach ensures clients receive best of breed solutions. With increasing volatility being experienced in the markets there is an increasing demand for bespoke investment solutions that achieve superior risk-adjusted investment returns alongside those which give a higher degree of confidence to achieve each family’s unique goals and aspirations,” says de Klerk.