Russia Wealth Report 2014

This report reviews the performance and asset allocations of HNWIs and Ultra HNWIs in Russia. It also includes an evaluation of the local wealth management market.

Scope

• Independent market sizing of Russian HNWIs across five wealth bands

• HNWI volume, wealth and allocation trends from 2009 to 2013

• HNWI volume, wealth and allocation forecasts to 2018

• HNWI and UHNWI asset allocations across 13 asset classes

• Geographical breakdown of all foreign assets

• Alternative breakdown of liquid vs investable assets

• Number of UHNWIs in major cities

• Number of wealth managers in each city

• City ratings of wealth management saturation and potential

• Details of the development, challenges and opportunities of the Wealth Management and Private Banking sector in Russia

• Size of Russia's wealth management industry

• Largest private banks by AuM

• Detailed wealth management and family office information

• Insights into the drivers of HNWI wealth

Key Highlights

• There were 161,581 HNWIs in Russia in 2013. These HNWIs held US$1.1 trillion in wealth.

• In 2013, the volume of Russian HNWIs rose by 1.2%, following a 2012 decrease of 0.5%.

• Growth in HNWI wealth and numbers are expected to improve over the forecast period. The number of Russian HNWIs is forecast to grow by 4.5%, to reach 170,129 in 2018. HNWI wealth is projected to grow by 17%, to reach US$1.4 trillion by 2018.

• In 2013, Russian HNWIs held 30.8% (US$345 billion) of their wealth outside of their home country; the worldwide average is 20–30%.

Reasons to buy

• The WealthInsight Intelligence Center Database is an unparalleled resource and the leading resource of its kind. Compiled and curated by a team of expert research specialists, the database comprises dossiers on over 100,000 HNWIs from around the world.

• The Intelligence Center includes the tracking of wealth and liquidity events as they happen, and detailed profiles of major private banks, wealth managers and family offices in each market.

• With the Database as the foundation for research and analysis, WealthInsight is able to obtain an unsurpassed level of granularity, insight and authority on the HNWI and wealth management universe in each of the countries and regions covered.

• Comprehensive forecasts to 2018.

• Detailed information on UHNWIs in each major city.

Companies mentioned

VTB 24

Nomos-Bank

Uralsib

Bank Saint Petersburg

Promsvyzbank Private Banking

Alfa Bank

Bank of Moscow

Gazprombank

Rosselkhozbank

Sberbank

Table of Contents

Table of Contents

LIST OF TABLES

LIST OF FIGURES

1 Introduction

1.1 Details of this Report

1.2 Definitions

2 Executive Summary

3 Wealth Sector Fundamentals

3.1 Political Background

3.2 Economic Background

3.3 Social Background

3.4 Benchmarking Russia’s Wealth in Context

3.4.1 Distribution of wealth in Russia

3.5 HNWI Volume and Wealth Trends

4 Findings from the WealthInsight HNWI Database

4.1 Trends in HNWI Wealth to 2018

4.1.1 HNWI trend analysis

4.1.2 Trends of the wealth bands

4.1.3 Demographic breakdown of HNWIs

4.1.4 HNWIs – job titles

4.1.5 HNWIs – industry breakdown

4.1.6 HNWIs – industry performance

4.1.7 HNWIs – breakdown by city

4.1.8 HNWIs – city performance

4.1.9 HNWIs – city population densities

4.1.10 HNWIs – city forecasts

4.1.11 HNWIs – breakdown by state

4.1.12 HNWIs – state performance

4.1.13 HNWIs – state population densities

4.2 UHNWIs

4.2.1 UHNWI volume trend analysis

4.2.2 UHNWI wealth trend analysis

4.2.3 Demographic breakdown of UHNWIs

4.2.4 UHNWIs – industry breakdown

4.2.5 UHNWIs – city breakdown and performance

4.3 UHNWIs – Billionaires

4.3.1 Billionaire volume trend analysis

4.3.2 Billionaire wealth trend analysis

4.3.3 Billionaire per capita net worth trend analysis

4.3.4 List of billionaires

4.4 UHNWIs – Centimillionai

4.4.1 Centimillionaire volume trend analysis

4.4.2 Centimillionaire wealth trend analysis

4.4.3 Centimillionaire per capita net worth trend analysis

4.5 UHNWIs – Affluent Millionaires

4.5.1 Affluent millionaire volume trend analysis

4.5.2 Affluent millionaire wealth trend analysis

4.5.3 Affluent millionaire per capita net worth trend analysis

4.6 Core HNWIs

4.6.1 Core HNWI volume trend analysis

4.7 Core HNWIs – Mid-Tier Millionaires

4.7.1 Mid-tier millionnaire volume trend analysis

4.7.2 Mid-tier millionaire wealth trend analysis

4.7.3 Mid-tier millionaire per capita net worth trend analysis

4.8 Core HNWIs – Lower-Tier Millionaires

4.8.1 Lower-tier millionaire volume trend analysis

4.8.2 Lower-tier millionaire wealth trend analysis

4.8.3 Lower-tier millionaire per capita net worth trend analysis

5 Analysis of Russian HNWI Investments

5.1 Analysis by Asset Class

5.1.1 Trends in alternative assets

5.1.2 Trends in ‘art, wine and wheels’

5.1.3 Trends of investment in real estate

5.1.4 Trends of investment in cash and deposits

5.1.5 Trends of investment in fixed-income

5.1.6 Trends of investment in equity

5.1.7 Trends of investment in business interests

5.2 Analysis of Foreign Investments

5.2.1 Investments in Europe

5.2.2 Investments in North America (including the US, Mexico and the Caribbean)

5.2.3 Investments in Asia-Pacific

5.2.4 Investments in Central and South America

5.2.5 Investments in the Middle East

5.2.6 Investments in Africa

5.3 Alternative Breakdown: Liquid vs Investable Assets

5.4 Analysis of Russian UHNWI Investments

6 Competitive Landscape of the Wealth Sector

6.1 Competitive Landscape

6.1.1 Domestic banks

6.1.2 Foreign Private Banks

6.1.3 Wealth managers

6.1.4 Family offices

6.1.5 Financial advisors

6.2 Developments in the Russian Private banking sector

6.3 Wealth Management Industry and Private Banking Sector

6.4 Russian Wealth Management Industry – Clientele Model and Maturity

6.5 Behavioral Mapping of Wealth Management and Private Banking in Russia

6.6 Porter’s Five Force Analysis – the Wealth Management Industry

7 Appendix

7.1 Additional Components of the Wealth Sector in Russia

7.1.1 Philanthropy

7.1.2 Human resource availability for the wealth management industry

7.2 Regulations on Taxes

7.3 Regulations Related to Immigration, Investment and Employment

7.4 Key Drivers

7.4.1 RUB to US$ exchange rate

7.4.2 Real GDP growth

7.4.3 Per capita GDP

7.4.4 Domestic market capitalization

7.4.5 Commodity index

7.4.6 Foreign direct investments (FDI) – inflows and outflows

7.4.7 Inflation rate

7.4.8 Interest rate

7.4.9 Balance of payments

7.4.10 Government debt

7.4.11 Stock market performance

7.5 Wealth Breakdowns

8 About WealthInsight

List of Tables

Table 1: HNWI Wealth Band and Group Definitions

Table 2: Russian Population Volume of Key Cities (Million), 2013

Table 3: Russian HNWIs – Volume Distribution (%), 2013

Table 4: Russian HNWIs – Wealth Distribution Wealth Pyramid (%), 2013

Table 5: Russian HNWIs – Industry Performance (%), 2009–2013

Table 6: Russian HNWIs – Populations in Cities and Percentage of HNWIs, 2013

Table 7: Russian HNWIs – Growth in Top Cities (Thousand), 2009–2013

Table 8: Russian HNWIs – Population Density in Major Cities (Thousand), 2013

Table 9: Russian HNWIs Population in Top Cities (Thousand), 2009–2018

Table 10: Russian HNWIs – Growth Rates for Top Cities (%), 2009–2018

Table 11: Russian HNWIs – Population by State (Thousand), 2013

Table 12: Russian HNWIs – Population and State Growth Data, (%) 2009–2013

Table 13: Russian HNWIs – Population Density by State (%), 2013

Table 14: Russian UHNWIs – Gender Performance, 2009–2013

Table 15: Russian UHNWIs – Sources of Wealth (%), 2013

Table 16: Russian UHNWIs in Top Cities (Thousand), 2009–2018

Table 17: Russian UHNWIs Growth Rates for Top Cities (Thousand), 2009–2018

Table 18: Russian Billionaires – Market Overview (US$ Billion) 2009–2018

Table 19: Russian Top-10 Billionaires (US$ Billion), 2013

Table 20: Russian Billionaire Wealth Growth (US$), 2009−2013

Table 21: Russian Centimillionaires – Market Overview (US$), 2009–2018

Table 22: Russian Affluent Millionaires – Market Overview (US$), 2009–2018

Table 23: Russian Mid-Tier Millionaires – Market Overview (US$), 2009–2018

Table 24: Russian Lower-Tier Millionaires – Market Overview (US$), 2009–2018

Table 25: Russian Allocations of HNWI Assets (%), 2009–2018

Table 26: Russian HNWIs − Holdings Growth (%), 2009–2018

Table 27: Russian HNWIs – Alternative Asset Composition (%), 2009–2018

Table 28: Russian HNWIs – Trends of Investments in Alternative Assets (%), 2009–2018

Table 29: Russian Trends in ‘Art, Wine and Wheels’, 2009–2013

Table 30: Global Prime Real Estate Prices per m2 (US$), 2014

Table 31: Russian HNWIs – Percentage of Foreign Investment Allocations (%), 2009–2018

Table 32: Russian HNWIs – Liquidity Breakdown (US$ Billion), 2009–2018

Table 33: Russian HNWIs – Liquidity Breakdown (%), 2009–2018

Table 34: Russian UHNWIs – Allocations and Share of HNWI Assets, 2013

Table 35: Russian Leading Domestic Private Banks, 2013

Table 36: Russian Leading Foreign Private Banks, 2013

Table 37: Russian Wealth Managers, 2013

Table 38: Russian Family Offices, 2013

Table 39: Russian Wealth Management Industry – Recent Deal Activity, 2013

Table 41: Russian Exchange Rate – RUB to US$, 2009–2018

Table 42: Russian Real GDP Growth (%), 2009–2018

Table 43: Russian GDP Per Capita (US$), 2009–2018

Table 44: Russian Domestic Market Capitalization (US$ Billion), 2009–2013

Table 45: Russian Commodity Indices, 2009–2018

Table 46: Russian Foreign Direct Investments (US$ Billion), 2009–2018

Table 47: Russian Inflation Rate (%), 2009–2018

Table 48: Russian Money Market Rate (%), 2009–2018

Table 49: Russian Balance of Payments (US$ Billion), 2009–2013

Table 50: Russian Government Debt as a Percentage of GDP (%), 2009–2018

Table 51: Russian Stock Market Performance (Index), 2009–2013

Table 52: Russian HNWI Wealth vs GDP Ratio (%), 2009–2018

Table 53: Russia – Appendix One

Table 54: Russia – Appendix Two

List of Figures

Figure 1: HNWI Wealth Band Definitions

Figure 2: Map of Russia

Figure 3: Russian Asset Price Performance (US$), 2009–2013

Figure 4: Russian HNWI Performance, (US$), 2009–2018

Figure 5: Russian vs Global HNWIs in Terms of Volume and GDP per Capita Growth (US$), 2009–2013

Figure 6: Russian HNWIs – Growth Factor Correlation (Index), 2009–2013

Figure 7: Russian HNWIs – Volume Distribution Wealth Pyramid (%), 2013

Figure 8: Russian HNWIs – Wealth Distribution Wealth Pyramid (%), 2013

Figure 9: Russian HNWIs – Age Distribution, 2013

Figure 10: Russian HNWIs – Job Titles, 2009–2013

Figure 11: Russian HNWIs – Distribution by Industry (%), 2013

Figure 12: Russian HNWIs – City Performance (Thousand), 2009–2013

Figure 13: Russian HNWIs – City Population Volumes (Thousand), 2009–2013

Figure 14: Russian HNWIs – City Forecasts (Thousand), 2014–2018

Figure 15: Russian HNWIs – City Population Volumes (Thousand), 2014–2018

Figure 16: Russian UHNWIs – Wealth Share vs Volume Growth (%), 2009–2013

Figure 17: Russian UHNWIs – Volume by Wealth Band (Thousand), 2009–2018

Figure 18: Russian UHNWIs – Wealth by Wealth Band (US$ Billion), 2009–2018

Figure 19: Russian UHNWIs – Age Distribution (Percentage Share), 2013

Figure 20: Russian UHNWIs – Distribution by Industry, 2013

Figure 21: Russian Billionaires – Market Overview (US$), 2009–2018

Figure 22: Russian Centimillionaires – Market Overview (US$), 2009–2018

Figure 23: Russian Affluent Millionaires – Market Overview (US$), 2009–2018

Figure 24: Russian Mid-Tier Millionaires – Market Overview (US$), 2009–2018 5

Figure 25: Russian Lower-Tier Millionaires – Market Overview (US$), 2009–2018

Figure 26: Russian HNWIs – Asset Class Composition (%), 2009–2018

Figure 27: Russian HNWIs – Trends in Alternative Assets (US$ Billion), 2009–2018

Figure 28: Russian Trends in ‘Art, Wine and Wheels’, 2009–2013

Figure 29: Russian HNWIs – Foreign Investment Allocation and Growth (%), 2013

Figure 30: Russian HNWIs – Global Distribution of Foreign Investments (%), 2009–2018

Figure 31: Russian HNWIs – Liquidity Breakdown (%), 2009–2018

Figure 32: Russian UHNWIs – Asset Class Composition (%), 2009–2018

Figure 33: Russian Wealth Management Industry – Maturity Level of Operators

Figure 34: Russian Wealth Management Industry – Behavioral Mapping, 2013

Figure 35: Russian Wealth Management Industry – Five Forces Analysis

Figure 36: Russian Exchange Rate – RUB to US$, 2009–2018

Figure 37: Russian Real GDP Growth (%), 2009–2018

Figure 38: Russian GDP Per Capita (US$), 2009–2018

Figure 39: Russian Domestic Market Capitalization (US$ Billion), 2009–2013

Figure 40: Russian Commodity Indices, 2009–2018

Figure 41: Russian Foreign Direct Investments (US$ Billion), 2009–2018

Figure 42: Russian Inflation Rate (%), 2009–2018

Figure 43: Russian Money Market Rate (%), 2009–2018

Figure 44: Russian Balance of Payments (US$ Billion), 2009–2013

Figure 45: Russian Government Debt as a Percentage of GDP (%), 2009–2018

Figure 46: Russian Stock Market Performance (Index), 2009–2013

Figure 47: Russian HNWI Wealth vs GDP Ratio (%), 2009–2018

Figure 48: Russian HNWIs – Volume by Wealth Band, 2009–2018

Figure 49: Russian HNWIs – Wealth by Wealth Band (US$ Billion), 2009–2018

Figure 50: Russian HNWIs – Wealth per Capita (US$ Million), 2009–2018

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