South Africa Wealth Report 2016

With a contracting economy and fears of recession, many HNWIs in South Africa are starting to tighten their belts and look more closely at their spending and portfolios. However, there are still pockets of growth: Johannesburg’s HNWI population will see double-digit growth in the next five years as a result of a healthy financial services industry.

South Africa is the hub of private banking in Africa, with Johannesburg as the biggest center. Private banking in South Africa is offered by the country’s four biggest retail banks – Absa, Standard Bank, First National Bank and Nedbank – along with niche private banks.

Scope

• An evaluation of the local wealth management market

• Analysis of HNWI volume, wealth and allocation trends between 2011 and 2015

• HNWI volume, wealth and allocation forecasts to 2020

• An examination of HNWI and UHNWI asset allocations in 13 asset classes

• A geographical breakdown of all foreign assets

• An alternative breakdown of liquid versus investable assets

• Data on the number of HNWIs in major South African cities, with forecasts to 2020

• Insights into the key drivers of HNWI wealth in South Africa

• Independent market sizing of South Africa’s HNWIs in five wealth bands

• Information on private banks in South Africa

• A detailed overview of the local economy

• Wealth management and family office information

• Insight into the development, challenges and opportunities for participants in the wealth management and private banking sector in South Africa

Key Highlights

How many HNWIs are there in South Africa? How much wealth in US$ billion do they collectively hold?

By what percentage did the volume of South African HNWIs decrease in 2015? How does this compare to the figures for the preceding year?

What is the percentage growth forecast for the HNWI population in South Africa? What is the projected total of HNWIs by 2020? By what percentage is their wealth forecast to grow? What is the anticipated total in US$ billion in 2020?

Reasons to buy

• Analyze five South African wealth bands and identify preferences for wealth management services in each band. Identify new growth opportunities while minimizing risk.

• Investigate the asset allocations of HNWIs and ultra-HNWIs, including projections of their volume, wealth and asset allocations to 2020. Determine any substantial growth over the forecast period, and target value propositions to increase market share.

• Assess the private banking and wealth management sector in South Africa, and make informed business decisions based on the most current market information.

• Evaluate HNWI volumes in each major city; target prospects more precisely to drive revenue growth.

Companies mentioned

South African Reserve Bank, Absa, Standard Bank, First National Bank, Ned Bank, Investec, Rand Merchant Bank, BNP Paribas, Citi Bank, HSBC, JP Morgan, Citadel Wealth Management, Peregrine Holdings Limited

Table of Contents

Table of Contents

1 Introduction

1.1 Details of this Report

1.2 Definitions

2 Executive Summary

3 South Africa Key Facts

4 Distribution of Wealth in South Africa

4.1 HNWI Volume and Wealth Trends

5 Findings from the WealthInsight HNWI Database

5.1 Trends in HNWI Wealth to 2020

5.1.1 HNWI trend analysis

5.1.2 Wealth band trends

5.1.3 Demographic breakdown of HNWIs

5.1.4 HNWIs – job titles

5.1.5 HNWIs – industry breakdown

5.1.6 HNWIs – industry performance

5.1.7 HNWIs – breakdown by city

5.1.8 HNWIs – city performance

5.1.9 HNWIs – city population densities

5.1.10 HNWIs – city forecasts

5.2 UHNWIs

5.2.1 UHNWI volume trend analysis

5.2.2 UHNWI wealth trend analysis

5.2.3 Demographic breakdown of UHNWIs

5.2.4 UHNWIs – industry breakdown

5.2.5 UHNWIs – city breakdown and performance

5.3 UHNWIs – Billionaires

5.3.1 Billionaire volume trend analysis

5.3.2 Billionaire wealth trend analysis

5.3.3 Billionaire per capita net worth trend analysis

5.3.4 List of billionaires

5.4 UHNWIs – Centimillionaires

5.4.1 Centimillionaire volume trend analysis

5.4.2 Centimillionaire wealth trend analysis

5.4.3 Centimillionaire per capita net worth trend analysis

5.5 UHNWIs – Affluent Millionaires

5.5.1 Affluent millionaire volume trend analysis

5.5.2 Affluent millionaire wealth trend analysis

5.5.3 Affluent millionaire per capita net worth trend analysis

5.6 Core HNWIs

5.6.1 Core HNWI volume trend analysis

5.7 Core HNWIs – Mid-Tier Millionaires

5.7.1 Mid-tier millionaire volume trend analysis

5.7.2 Mid-tier millionaire wealth trend analysis

5.7.3 Mid-tier millionaire per capita net worth trend analysis

5.8 Core HNWIs – Lower-Tier Millionaires

5.8.1 Lower-tier millionaire volume trend analysis

5.8.2 Lower-tier millionaire wealth trend analysis

5.8.3 Lower-tier millionaire per capita net worth trend analysis

6 Analysis of South Africa HNWI Investments

6.1 Analysis by Asset Class

6.1.1 Trends in alternative assets

6.1.2 Trends in ‘art, wine and wheels’

6.1.3 Trends of investment in real estate

6.1.4 Trends of investment in cash and deposits

6.1.5 Trends of investment in fixed-income

6.1.6 Investment trends in equity

6.1.7 Investments trends in business interests

6.2 Analysis of Foreign Investments

6.2.1 Investments in Europe

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

6.2.3 Investments in Asia-Pacific

6.2.4 Investments in South America

6.2.5 Investments in the Middle East

6.2.6 Investments in Africa

6.3 Alternative Breakdown: Liquid vs Investable Assets

6.4 Analysis of South Africa UHNWI Investments

7 Competitive Landscape

7.1 Domestic private banks

7.2 Foreign Private Banks

7.3 Wealth managers

7.4 Family offices

8 Key Drivers

8.1 ZAR–US$ Exchange Rate

8.2 Real GDP Growth

8.3 Per Capita GDP

8.4 Domestic Market Capitalization

8.5 Commodity Index

8.6 Foreign Direct Investment (FDI) – Inflows and Outflows

8.7 Inflation Rate

8.8 Interest Rate

8.9 Balance of Payments

8.10 Government Debt

8.11 Stock Market Performance

8.12 Wealth Breakdowns

9 About WealthInsight

List of Tables

Table 1: HNWI Wealth Band and Group Definitions

Table 2: South African HNWIs – Volume Distribution (%), 2015

Table 3: South African HNWIs – Wealth Distribution Wealth Pyramid (%), 2015

Table 4: South African HNWIs – Industry Performance (%), 2011–2015

Table 5: South African HNWIs – Cities, 2015

Table 6: South African HNWIs – Growth in Top Cities (Thousand), 2011–2015

Table 7: South African HNWIs – Population Density in Major Cities 2015

Table 8: South African HNWIs – Populations in Top Cities (Thousand), 2011–2020

Table 9: South African HNWIs – Growth Rates for Top Cities (%), 2011–2020

Table 10: South African HNWIs – Sources of Wealth (%), 2015

Table 11: South African UHNWIs – Gender Performance (%), 2011–2015

Table 12: South African UHNWIs – Populations in Top Cities, 2011–2020

Table 13: South African UHNWIs – Growth Rates for Top Cities (%), 2011–2020

Table 14: South African Billionaires – Market Overview (Volume and US$ Billions) 2011–2020

Table 15: South African Top Billionaires (US$ Billion), 2015

Table 16: South African Billionaires – Wealth Growth (US$ Billion), 2011−2015

Table 17: South African Centimillionaires – Market Overview (Volume and US$ Million/Billion), 2011–2020

Table 18: South African Affluent Millionaires – Market Overview (Volume and US$ Million/Billion), 2011–2020

Table 19: South African Mid-Tier Millionaires – Market Overview (Volume and US$ Million/Billion), 2011–2020

Table 20: South African Lower-Tier Millionaires – Market Overview (Volume and US$ Million/Billion), 2011–2020

Table 21: South African HNWIs – Assets Allocations (%), 2011–2020

Table 22: South African HNWIs – Holdings Growth (%), 2011–2020

Table 23: South African HNWIs – Alternative Asset Composition (%), 2011–2020

Table 24: South African HNWIs – Trends of Investments in Alternative Assets (%), 2011–2020

Table 25: South African Trends in ‘Art, Wine and Wheels’, 2011–2015

Table 26: Global Prime Real Estate Prices per m2 (US$), 2015

Table 27: South African HNWIs – Foreign Investment Allocations (%), 2011–2020

Table 28: South African HNWIs – Liquidity Breakdown (US$ Billion), 2011–2020

Table 29: South African HNWIs – Liquidity Breakdown (%), 2011–2020

Table 30: South African UHNWIs – Allocations and Share of HNWI Assets (%), 2015

Table 31: South African Exchange Rate – CAD–US$ Exchange Rate, 2011–2020

Table 32: South African Real GDP Growth (%), 2011–2020

Table 33: South African GDP per Capita (US$), 2011–2020

Table 34: South African Domestic Market Capitalization (US$ Billion), 2011–2015

Table 35: South African Commodity Indices, 2011–2020

Table 36: South African Foreign Direct Investment (US$ Billion), 2011–2020

Table 37: South African Inflation Rate (%), 2011–2020

Table 38: South African Money Market Rate (%), 2011–2020

Table 39: South African Balance of Payments (US$ Billion), 2011–2015

Table 40: South African Government Debt as a Percentage of GDP (%), 2011–2020

Table 41: South African Stock Market Performance (Index), 2011–2015

Table 42: South African HNWI Wealth vs GDP Ratio (%), 2011–2020

Table 43: South Africa – Appendix One

Table 44: South Africa – Appendix Two

List of Figures

Figure 1: HNWI Wealth Band Definitions

Figure 2: Map of South Africa

Figure 3: South African Asset Price Performance (%), 2011–2015

Figure 4: South African HNWI Performance (US$ Billion and HNWI Volume), 2011–2020

Figure 5: South African vs Global HNWIs (%), 2011–2015

Figure 6: South African HNWIs – Growth Factor Correlation, 2011–2015

Figure 7: South African HNWIs – Wealth Pyramid (Volume Distribution), 2015

Figure 8: South African HNWIs – Wealth Pyramid (Wealth Distribution), 2015

Figure 9: South African HNWIs – Age Distribution (%), 2015

Figure 10: South African HNWIs – Job Titles (%), 2011–2015

Figure 11: South African HNWIs – Distribution by Industry (%), 2015

Figure 12: South African HNWIs – City Performance (%), 2011–2015

Figure 13: South African HNWIs – Volume of HNWIs by City (Thousand), 2011–2015

Figure 14: South African HNWIs – City Forecasts (%), 2016–2020

Figure 15: South African HNWIs – Population by City (Thousand), 2016–2020

Figure 16: South African UHNWIs – Wealth Share vs Volume Growth (%), 2011–2015

Figure 17: South African UHNWIs – Volume by Wealth Band, 2011–2020

Figure 18: South African UHNWIs – Wealth by Wealth Band (US$ Billion), 2011–2020

Figure 19: South African UHNWIs – Age Distribution (Percentage Share), 2015

Figure 20: South African UHNWIs – Distribution by Industry (%), 2015

Figure 21: South African Billionaires – Market Overview (Volume and US$ Billion), 2011–2020

Figure 22: South African Centimillionaires – Market Overview (Volume and US$ Million/Billion), 2011–2020

Figure 23: South African Affluent Millionaires – Market Overview (Volume and US$ Million/Billion), 2011–2020

Figure 24: South African Mid-Tier Millionaires – Market Overview (Volume and US$ Million/Billion), 2011–2020

Figure 25: South African Lower-Tier Millionaires – Market Overview (Volume and US$ Million/Billion), 2011–2020

Figure 26: South African HNWs – Asset Class Composition (%), 2011–2020

Figure 27: South African HNWIs – Trends in Alternative Assets (US$ Billion), 2011–2020

Figure 28: South African Trends in ‘Art, Wine and Wheels’, 2011–2015

Figure 29: South African HNWIs – Foreign Investment Allocation and Growth (%), 2015

Figure 30: South African HNWIs – Global Distribution of Foreign Investments (%), 2011–2020

Figure 31: South African HNWIs – Liquidity Breakdown (%), 2011–2020

Figure 32: South African UHNWIs – Asset Class Composition (%), 2011–2020

Figure 33: South African Exchange Rate – NGN–US$, 2011–2020

Figure 34: South African Real GDP Growth (%), 2011–2020

Figure 35: South African GDP per Capita (US$), 2011–2020

Figure 36: South African Domestic Market Capitalization (US$ Billion), 2011–2015

Figure 37: South African Commodity Indices, 2011–2020

Figure 38: South African Foreign Direct Investment (US$ Billion), 2011–2020

Figure 39: South African Inflation Rate (%), 2011–2020

Figure 40: South African Money Market Rate (%), 2011–2020

Figure 41: South African Balance of Payments (US$ Billion), 2011–2015

Figure 42: South African Government Debt as a Percentage of GDP (%), 2011–2020

Figure 43: South African Stock Market Performance (Index), 2011–2015

Figure 44: South African HNWI Wealth vs GDP Ratio (%), 2011–2020

Figure 45: South African HNWIs – Volume by Wealth Band, 2011–2020

Figure 46: South African HNWIs – Wealth by Wealth Band (US$ Billion), 2011–2020

Figure 47: South African HNWIs – Wealth per Capita (US$ Million), 2011–2020

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