Ultra-rich to lose 10% wealth in 2022 due to Ukraine war: Study

The study, by London-based property consultant Knight Frank, examined the fate of ultra-high-net-worth individuals (UHNWIs): people with a net worth of at least $30 million, which includes their main residence.

“Challenging markets meant that most UHNWIs saw their wealth decline last year, with their collective wealth falling by 10 per cent,” the report said. – equivalent to $10.1 trillion.

“Last year the Ukraine crisis fueled the European energy crisis and further exacerbated already rising inflation,” said Liam Bailey, Knight Frank’s global head of research.

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“As a result, 2022 sees the sharpest increase in global interest rates in history,” he said.

The report said four in 10 ultra-rich saw their wealth increase in 2022, but “overwhelmingly the trend was negative”.

This was not surprising given the increase in interest rates implemented by many central banks to combat the rise in inflation.

Europe’s ultra-wealthy were hit the hardest, with their wealth falling by 17 per cent, followed by Australia by 11 per cent and the US by 10 per cent.

Africa and Asia got off more lightly, with declines of five percent and seven percent, respectively.

“Exchange rates had a significant impact,” wrote Flora Harley, the report’s executive editor.

“The dollar’s strength, driven by the Federal Reserve’s unwavering commitment to one of the steepest cycles of rate hikes in history, was unmatched,” he said.

There are still “significant risks” to the world economy, Bailey said.

But later this year “market sentiment will change rapidly, and investors need to be well prepared to take advantage of the real opportunities emerging in global real estate markets”.

Knight Frank said 69 per cent of wealthy investors expected to grow their portfolios this year.