The millionaires didn’t have it easy last year either. They have become (slightly) fewer in number and suffered their biggest setback in ten years. This did not prevent the size of the private jet market from growing by 5.6%.
The consulting firm Capgemini has published its World Wealth Report 1er June. It says the number of high-net-worth individuals — with US$1 million or more to invest — fell 3.3% globally, to 21.7 million people in 2022. the overall value of their wealth shrank by 3.6% to US$83 trillion. “This is the largest decline in ten years (2013-2022), triggered by geopolitical and macroeconomic uncertainty,” the firm said.
The largest decline in individual wealth was observed in North America (-7.4%), followed by Europe (-3.2%) and Asia-Pacific (-2 .7%). In contrast, the affluent population of Africa, Latin America and the Middle East have stood out with increased personal wealth in 2022 thanks to the strong financial performance of the oil and gas sectors.
In Canada, despite the weight of fossil fuels in the economy, the number of high net worth individuals fell by 2.4%, to 428,400, and the value of their combined assets fell by 3.3%, to 45 US$.7 billion, took over a blog from the Financial Post. This contraction is explained by an increase of only 1.6% in the average price of real estate last year, compared to 10.6% in 2021. Also by a 10% erosion of market capitalization and by the strong increase inflation, which peaked at 8.1% in June. This impact has been partly mitigated by an increase in the savings rate and a marginal propensity to consume that decreases the higher one climbs the income grid.
Overall, the bulk of the assets of these wealthy were held in the form of cash last year. This percentage of 34% was intended to be the highest level in 27 years, since Capgemini compiled this data. The remainder was split between equities (23%), real estate (15%), fixed income (15%) and alternative investments (13%).
What about ESGs?
Interestingly, the Capgemini report shows that investing according to environmental, social and governance (ESG) criteria remains a priority for this clientele. Although only 23% said they had generated more returns from ESG-related assets, in the face of inclement economic conditions, 41% of survey respondents cited this form of impact investing as a top priority, and 63% said they have requested ESG reviews for their asset. They have in front of them more cautious wealth management companies. A slim majority (52%) see ESG data analysis as a top priority, and a minority (31%) value traceability.
Of managers surveyed, 40% said they needed more data to understand ESG impact, and nearly one in two said they needed more ESG information to effectively engage with clients.
Private jets are popular
A decline in enrichment and a declared sensitivity to ESG factors which, however, did not affect the volume of business of private jets, one of the main external symbols of wealth. The Patriotic Millionaires site quotes a study by the Institute for Policy Studies indicating that the number of these devices in the world fleet has increased by 133% over the past two decades, from 9,895 in 2000 to 23,133 in mid-2022. . The size of this market has increased from US$32.3 billion in 2021 to US$34.1 billion in 2022, an increase of 5.6%. This growth has been accompanied by an unprecedented number of business jet operations, at 5.3 million last year, adds the study of the think tank.
The site takes up the example of Elon Musk and adds an environmental dimension to its observation. The Tesla and Twitter boss, among others, is reported to have taken a private jet flight approximately every other day in 2022, producing 2,112 tonnes of carbon dioxide emissions last year alone. “That’s 132 times more than the total carbon footprint of an average person in the United States. He is one of the most active in the United States. It bought a new aircraft, flew 171 flights, contributed to the consumption of 837,934 liters of jet fuel and was responsible for 2,112 tonnes of carbon emissions in 2022.”
More generally, since the start of the pandemic, the use of private jets has increased by around a fifth, and their GHG emissions have jumped by more than 23%, according to a recent study cited by Patriotic Millionaires, which recalls that they emit at least 10 times more pollutants than commercial aircraft per passenger.
“While Sustainable Aviation Fuels (SAFs) have a role to play in reducing aviation emissions, they should not be viewed as a panacea by the private jet industry. SAFs still produce emissions, although less than traditional fuels, and they are currently expensive and rarely used. »