The World’s Richest Are Getting Richer Again

A resilient global economy is leading to a rise in wealth once again for the world’s richest individuals, despite plenty of economic and geopolitical uncertainty, according to a new report.

Globally, the population of those with at least US$1 million in investable assets rose by 5.1% last year to 22.8 million, while their wealth rose 4.7% to US$86.8 trillion, according to the 28th annual World Wealth Report from Capgemini Research Institute, a global think tank division of Paris-based Capgemini.

It’s a sharp difference from a year earlier, when global wealth fell 3.3% to US$83 trillion.

The growth trend was particularly evident in the U.S. last year, where economic resilience, slowing inflation, and soaring U.S. stocks led to a 7.3% increase in the population of those with at least US$1 million in investable assets to 7.5 million, Capgemini said. The wealth of these individuals rose 7% to US$26.1 trillion.

“We are back in business,” says Elias Ghanem, global head of Capgemini Research Institute for Financial Services. “It’s a good message for the economy, it’s a good message for the people, and it’s a good message that growth is back on stage.”

Among the ultra wealthy—those with at least US$30 million in investable assets—the global population rose by 5% to 220,000, while their wealth grew by 3.9% to about US$29.4 trillion. That represents 34% of total global wealth, according to Capgemini.

A big reason for the upturn in wealth was a strong recovery in global stocks, and the fact that the wealthy moved their assets out of cash and cash equivalents. Globally, this population’s average allocation to cash was 34% as of January 2023; by January this year, cash allocations dropped to 25% on average.

“There’s a move in the high-net-worth mind from wealth preservation back to growth, and that’s good,” Ghanem says.

Although average global stock allocations dropped to 21% as of January this year from 23% a year earlier, the wealthy boosted their allocations to fixed-income by 5 percentage points to 20%, to lock in higher rates, Ghanem says. They also moved money into real estate as prices declined, increasing that investment, on average, by 4 percentage points to 19%.

“As interest rates went up, the real estate to be sold increased, and thus the price went down, and high-net-worth individuals leveraged the opportunity to invest,” Ghanem says. That investment has a positive ripple effect on the broader economy, he says.

The wealthy also boosted their allocations to alternative investments, mostly private equity and private credit, by 2 percentage points to 15%. That’s money that funds the private sector, where businesses are engaged in creating industries and products “that are essential to transforming our economy,” Ghanem says.

The message all these moves make: “Money is circulating again and money circulating is growth for everyone,” he says.

Capgemini’s annual report doesn’t predict the future, but the shifts in asset allocation point to a new perspective by the wealthy that takes into account the shocks of the recent past, from the pandemic, to inflation, and war.

“The business environment has considered these factors and is able to manage them,” Ghanem says.

Whether China reopens for business remains “a big question mark,” however, he says. Though the Nasdaq stock index in the U.S. gained 43% in 2023, after tumbling 34% a year earlier, the Shanghai Stock Index posted a decline of 3.7% last year, better than a nearly 15% drop a year earlier, but still sluggish.

As a result, Asia has yet to regain its status as the world’s wealthiest region—which it was from 2017-19, on the strength of growth in both China and India, Ghanem says.

The report was based on a survey of 3,119 individuals (including more than 1,300 ultra-wealthy) living in 26 markets in North America, Latin America, Europe, the Middle East, and Asia-Pacific, the firm said.

The findings are aimed at wealth management firms serving these elite populations across the globe. Among the uber-wealthy, Capgemini warns these firms have competition from family offices that are better positioned to orchestrate non-financial services, such as education or travel, and to bargain among banks to get the best deals, and services. That’s reflected in the fact the number of wealth management firms hired by the ultra-wealthy has risen to seven on average from three in 2020, Capgemini found.

“With their diverse operating models fully aligned with the objectives of the families they service, family offices are becoming more visible and are significantly challenging traditional wealth management firms,” the report said.

Capgemini’s conclusion: Wealth management firms need to decide if they want to compete against family offices or collaborate with them.

One way the report urges them to compete is by developing behavioural finance technology driven by artificial intelligence. These systems can be trained to understand biases and identify them early on to help individuals avoid making bad decisions, Ghanem says.

“One of the strongest messages of the report is that it’s time for the banks to leverage AI-powered behavioral finance to interact better with their clients,” he says.

For decades, the world’s computing power has quietly expanded at an astonishing pace.

From the first transistor developed at Bell Labs in 1947 to modern processors containing billions and even trillions of transistors, each generation of technology has been faster, smaller and more powerful than the last.

But according to quantum physicist and technology entrepreneur David Reilly, that era of effortless progress is beginning to slow.

Reilly, CEO of Sydney-based Emergence Quantum and Professor of Physics at the University of Sydney, says the computing infrastructure underpinning modern economies is approaching fundamental physical limits.

And that could have enormous implications for finance, artificial intelligence and global investment.

Speaking at an industry event organised by Kanebridge International, Reilly said many critical parts of modern society depend on computing and the infrastructure used to process information.

The slowdown behind the tech boom

For years, the technology industry relied on a steady improvement known as Moore’s Law, where the number of transistors on a chip doubled roughly every two years.

More transistors meant more computing power, allowing faster software, smarter devices and ever-larger data systems.

Today, however, those gains are slowing.

“It feels to me very innate that I’m going to just find that next year there’s going to be another breakthrough,” Reilly said.

“But if you look at the data…there’s a slowing down, a roll off in performance that started some 10, 20 years ago.”

Rather than making chips dramatically faster, manufacturers are now largely increasing computing capacity by packing more transistors onto each processor.

The approach works, but it comes with growing complexity, higher costs and increasing energy demands.

The brute-force race for AI

That challenge is already visible in the massive data centres being built to support artificial intelligence.

In the race to dominate AI, companies are constructing vast computing facilities that consume huge amounts of electricity and water. Reilly described this expansion as a “brute force” approach driven by the global competition to develop advanced AI systems.

Yet the demand for computing power continues to accelerate.

Artificial intelligence, advanced robotics, healthcare research, pharmaceuticals and cybersecurity all require far more processing capacity than today’s systems can easily deliver.

The question now facing the technology sector is whether traditional computing can keep up.

Enter quantum computing

That is where quantum computing enters the conversation.

Unlike conventional computers, which process information using binary switches that represent ones and zeros, quantum computers exploit the unusual behaviour of particles at the atomic scale.

Reilly describes them as a fundamentally different type of machine.

“So a quantum computer is a wave computer,” he said.

Instead of processing information through simple on-off switches, quantum systems can use wave-like properties of particles to process many possible outcomes simultaneously.

Those waves can interact in complex ways, reinforcing correct solutions while cancelling out incorrect ones. In theory, this allows quantum systems to tackle certain types of problems dramatically faster than classical computers.

What it could mean for finance

The concept may sound abstract, but its potential applications are significant.

Quantum computers are expected to transform areas such as materials science, chemical modelling and pharmaceutical development.

They could also help solve complex optimisation problems in logistics, finance and risk management.

For financial institutions in particular, the technology could offer new tools for detecting fraud, analysing market behaviour and optimising portfolios.

But the shift will not happen overnight.

“One message to take away is that quantum is not going to suddenly solve all of your problems,” Reilly said.

Instead, he said quantum systems will likely complement existing computing technologies as part of a broader and more diverse computing ecosystem.

Why data centres may soon “go cold”

One key change already emerging is how computing systems are physically designed.

Many next-generation technologies, including quantum processors, operate far more efficiently at extremely low temperatures. As a result, future data centres may rely heavily on cryogenic cooling systems to manage heat and energy consumption.

Reilly believes that the shift will gradually reshape the computing industry.

“Over the next five years, you’re going to see data centres go cold,” he said.

“And as that happens, they almost drag with them new compute paradigms.”

Emergence Quantum, the company he co-founded, is focused on developing technologies to support that transition, including cryogenic electronics and integrated hardware platforms designed for quantum computing and energy-efficient systems.

A new technological era

For investors and businesses, the technology remains in its early stages. But the scale of global interest is growing rapidly.

Governments, research institutions and technology companies are investing heavily in quantum research, betting it could become a foundational technology for the next generation of computing.

For Reilly, the moment feels similar to earlier technological turning points.

In the 19th century, new discoveries in thermodynamics helped drive the development of steam engines and the Industrial Revolution. In the 20th century, advances in electromagnetism led to radio, television and eventually the internet.

Quantum physics, he suggests, could represent the next chapter in that story.

“Today we have, as a society, in our hands new physics that we’re just beginning to figure out what to do with,” Reilly said.

“But I think it’s an exciting time to be alive and watch what happens over the coming decades.”