Surveys

Most Billionaires Are Self-Made, Nearly Half The World's Biggest Fortunes Are Family-Run - Forbes

Max Skjönsberg, London, 30 March 2012

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The report also found that self-made fortunes have also seen the highest growth in the last couple of years, with an increase of 24 per cent compared with 21 per cent for inherited wealth. Forbes distinguishes between passive heirs and those with personal involvement in their inherited fortunes. Fortunes in the latter category have grown by 12 per cent in 2010 and 2011.

While 70 per cent of the billionaires in Forbes’ database have self-made fortunes, the survey found that fewer than that (58 per cent) manage their wealth on an individual basis. Family-managed fortunes are concentrated in some regions and hardly exist in others, especially in countries such as Russia with new wealth. In general, the break-up between family involvement and no family involvement is more equally distributed in developed countries than in the emerging markets. Forbes classifies no family involvement as when family members are not directly involved in the business that created the wealth, which means that they can still be involved in decision-making but still fall into the same category.

In terms of sectors, finance is the sector with most family involvement. Other prominent sectors with family involvement are construction, real estate, services and food and beverages. Sectors dominated by an individual approach are non-financial investments and technology.

Old and new wealth

Forbes also found that nearly 80 per cent of the billionaires in emerging markets have created their own fortunes from scratch. The emerging economies Forbes looked at were Brazil, Russia, India, China, Mexico, the United Arab Emirates, Saudi Arabia, Kuwait and Lebanon. The corresponding figure for the mature markets in the study (France, Germany, Hong Kong, Singapore, the UK and the US) was 65 per cent.

Bruce described France as a country with a very family-oriented business culture, which is corroborated by the fact that two-thirds of its fortunes are family-run.

Germany has the highest number of billionaires in Western Europe, but “it is probably the toughest place to get information; it is not a place where you flaunt your wealth, it is behind closed doors,” Bruce said.

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