The UAE is in the top 15 countries globally of the most millionaires’ households and the leading country in the whole of GCC in terms of the private wealth growth aiming to reach a staggering USD 1 trillion by 2019, which is a 10.7% growth rate, according to the 2015 analysis BCG Global Wealth Report.
In 2014 alone, the annual growth rate was 8.5% due to a substantial investment into equities. The capital held in equities showed a growth rate of 13.8% in 2013 and 2014 combined. That is a significant growth compared to the growth rates of bonds with 1.7% and almost 7% for cash deposits.
In the next 5 years, the UAE’s private wealth, according to the BCG’s analysis, will show very promising rates in equities’ investments, some 47%, as well as 43% in cash deposits and almost 10% in bonds.
Overall, in the next 5 years, the total Compounded Annual Growth Rate of equities’ investments will rise by 18.5%, whereas cash deposits are expected to grow to 6.2% and bonds to 3.8%.
The number of Ultra High Net Worth players with more than USD 100 million rose by 9%, as per Markus Massi, the Managing Director & Partner of the BCG Middle East. The private wealth of UAE held by the Ultra High Net Worth households is expected to rise by a staggering rate of 21% until the end of 2019. The High Net Worth segment with between 20 and 100 million dollars is not lacking too far behind reporting 16.1% growth and a promising Compounded Annual Growth Rate of 12% due to new High Net Worth entrees over the next 5 years. The number of millionaires is expected to increase by 5.3% by the end of 2019.
According to the BCG’s study, the total percentage of nationals and expatriates millionaires in the whole of UAE is 3.8%. The private wealth in Middle East and Africa grew by 9% in 2014 amounting to around USD 6 trillion.
Even though a significant number of assets is held offshore presenting a great opportunity for wealth managers, the assets held onshore are still prevail in the UAE.
Such growth in number of the ultra-high net worth individuals in UAE has 2 main reasons – highly effective business environment which allows business to grow rapidly, and the attractive taxation system – not only for business, but also for private persons, resulting the inflow into the UAE of foreign wealthy individuals.