The M&A and private equity boom in Europe over the past three years has fuelled significant wealth creation for certain well-positioned individuals, said a report into “Liquidity Events” by financial news service Wealthmonitor. The UK & Ireland have seen the most new wealth created in Europe since 2006 with some 54 per cent of Europe’s latest newest high net worth individuals, accounting for 22 per cent of the overall total new wealth. The combined Germany, Austria, Switzerland region was second with 14 per cent on new HNWs and 19 per cent of the overall total new wealth, and Italy third with 10 per cent and 19 per cent respectively. Liquidity events originating from individuals based in the financial services sector have been the most lucrative, accounting for over €51.2 billion in new wealth creation, over double the consumer sector which realised €23.5 billion in combined new wealth. Since 2006, it is the UK that has been the centre for individual liquidity events with some €72 billion of individual wealth generated – almost double every other European territory. And there is as much potential wealth again to be realised by UK-based individuals in coming months. But it is Germany that is set to lead European liquidity events with some €131 billion in potential wealth after what has been a very subdued level of wealth creation since 2006 in Germany – just €14.8 billion. This potential wealth is embedded in holdings in both the extensive, and hitherto guarded, Mittelstand sector as well as the large cap Deutschland AG companies. In late summer 2007 Wealthmonitor interviewed European and UK individuals that had recently undergone a liquidity event worth between £15 million ($31 million) and £50 million. The aim was to highlight the softer issues that matter to these individuals when it comes to managing and investing their wealth, in particular their attitudes towards commissioning and managing wealth management advisory services. The vast majority – 81 per cent – of respondents employed a specific advisor to monitor their wealth. And most of these respondents favoured a wealth advisor based within their own territory, but 10 per cent use an overseas advisor. Some individuals retained two separate wealth advisors in different locations. The most frequent route to finding a wealth advisor was for individuals to receive a direct approach – 60 per cent of people admitted to having been directly approached. Referral only rated 30 per cent and direct approach by the client to the wealth advisor was the same. The most important rationale for the selection and retention of a wealth advisor was “personal relationship/trust” which was flagged by 65 per cent as most important. It was more highly regarded than ”investment performance”. Only 5 per cent of respondents ranked “tax advice” as the most important factor. In terms of the preferred level of control over wealth management activities, the majority (63 per cent) of respondents preferred a hybrid form of asset management where they were generally content to leave their wealth advisors to their own devices but requested to be more actively involved in the management of other areas of their investments themselves. A smaller group – 21 per cent – preferred advisory management where they kept firmly on top of their wealth managers. At the other end of the scale, a minority of 16 per cent were prepared to hand over full discretionary portfolio management to a wealth advisor. There was a widespread perception that hedge fund and private equity investments might be too risky or expensive, but this was balanced by some respondents who felt that such investments had a place but only as a minor part of a balanced portfolio. Two-thirds had sampled hedge fund investments but only 30 per cent had direct investment experience of private equity. In terms of purchasing alternative assets, buying art emerged well above other assets such as wine, antiques and even backing other entrepreneurs. The majority of respondents were involved in, or had philanthropic or charitable intentions regarding part of their newly tapped wealth. A handful of those interviewed had formed charitable foundations, or were trustees of charities.