Figures may suggest that the number of Ultra High Net Worth Individuals (UHNWIs) fell last year for the first time since the financial crisis hit in 2008, but a report by estate agents Knight Frank suggests that this segment of global society is still prepared to spend money on luxury goods.
UHNWIs are classed as having $30m (£22m) in disposable assets, not including their main place of residence. There are now 187,500 people in the world in this category, which represents a drop of three per cent from the 2014 figure of 193,100. In terms of hard cash, the value of the assets they control has fallen from $22 trillion to $19.3 trillion.
And yet those that have the wealth are not shy about spending it; they spent more on luxury goods in 2015 than in the previous year. Perhaps one of the most striking indicators of this is that 40% more super-yachts were bought in 2015 than in 2014. (A super-yacht is classed as a boat longer than 24 metres in length.) The owners of these vessels seem to be travelling further afield in their luxury yachts, too, with Antarctica and exotic ports in Asia becoming destinations of choice.
And the money being spent on super-yachts is reflected in other luxury goods. The market in collectable goods – sometimes known as “investments of passion” – is also healthy. Markets for art, cars, jewellery, stamps, wine and watches all improved in 2015; and records were set in auction houses.
Art auctions did particularly well. In May 2015, Pablo Picasso’s Les Femmes d’Alger set a new record for a painting sold at auction when it went under the hammer at Christie’s in New York for $179.4m. In November, a new second highest price was reached, also at Christie’s in New York, when Amedeo Modigliani’s Reclining Nude (Nu couché) sold for $170m. And at the same auction, a new record was paid for a work of pop art, when Roy Lichtenstein’s Nurse was sold for $95m.
Classic cars were also popular with wealthy collectors. In all, the value of these highly desirable vehicles rose by 17%. And even though no new record was set for the highest price paid for one, eight of the 25 most expensive cars ever sold were bought in 2015.
The value of coins rose by 13%; wine and luxury watches each went up by 5%. A new record for a gem or piece of jewellery was set at an auction at Sotheby’s in Geneva in November, when the Blue Moon, a rare fancy vivid blue diamond, sold for $48.4m.
But as a further indication that the value of investments can go down as well as up, 2015 also saw a slight drop in the number of dollar millionaires in the world. They are now estimated at 13.3m, down 0.3m on 2014. Nevertheless, this group still holds assets valued at $66 trillion, which amounts to a value greater than all global shares added together.
