The Wealth Report 2025: America First
Making sense of the latest trends in property and economics from around the globe
4 minutes to read
'You don't know what you've got till it's gone,' Joni Mitchell sang in 1970. Global investors are now grappling with that truth as they look back on the relative prosperity of 2024.
Beginning in the early months of the year, consensus that central banks had reached the end of their tightening campaigns fuelled big bets on risk assets like equities and crypto. The US’s S&P 500 index rose more than 20% for the second consecutive year as investors clamoured for a piece of AI powerhouses like Nvidia. Bitcoin surged 120%, helped in the latter weeks of the year by the election of Donald Trump, who pledged to loosen regulatory standards.
That made it another good year for the wealthy. The global population of high-net-worth-individuals (HNWIs), those worth at least US$10 million, expanded by 4.4% to more than 2.3 million people during the year, according to Knight Frank's Wealth Sizing Model, published this morning as part of The Wealth Report 2025. The population of individuals worth at least US$100 million climbed 4.2%, surpassing 100,000 for the first time.
Leading the world
America’s position as the world’s primary hub for wealth creation remains unchallenged for the time being. Almost 40% of the world’s HNWI population live in the US, compared with 20% for its nearest rival, China. Japan is the only other nation to boast a share of wealthy individuals larger than 5%.
It’s perhaps unsurprising, then, that the US led the world in wealth creation, with a 5.2% expansion in its population of HNWIs. Asia was close behind with growth of 5%, followed by Africa, which saw a 4.7% surge, albeit from a much lower base. Australasia’s HNWI population rose 3.9%, helped by its access to both Asian and North American markets.
Appetite for risk assets like equities has expanded rapidly in emerging markets like India, while European and Japanese attitudes to investing tend to be more conservative. India now has 85,698 HNWIs, which puts it fourth behind the US, China and Japan.
The population of HNWIs in the Middle East rose 2.7% last year, placing the region fifth. Almost 10% of its population of HNWIs fall into our US$100 million-plus category, a far larger proportion than any other region, which hints at the scale of wealth generated by legacy energy economies.
Where next?
What a difference two months make. Mitchell’s Big Yellow Taxi captured our tendency to overlook the good times while we’re in them, and few people would have picked the latter months of 2024 as a high watermark for those flush with risk assets.
Yet, here we are. By the market close on Wall Street yesterday, the three major US equity indices, led by the S&P 500, had erased the stellar gains made since President Trump's inauguration. The Bloomberg Galaxy Crypto Index, which measures the dollar-performance of the largest cryptocurrencies, plummeted 28% in February alone. The selloff has been so pronounced that bonds have outperformed equities since Trump’s election.
“There will be a little disturbance, but we’re OK with that,” Trump told Congress yesterday, shortly after doubling down on his decision to impose 25 percent tariffs on Canada and Mexico, and an additional 10 percent levy on China.
Of course, markets have a way of adjusting, and while risk appetite has diminished for now, recent history suggests that sentiment can shift just as quickly in the other direction. Central banks remain poised to continue easing monetary policy, and global supply chains are adjusting to new geopolitical realities. The coming months will offer new opportunities for those willing to look beyond the immediate turbulence.
The long view
Family offices are among those taking a long-term view, particularly when it comes to real estate.
Many see uncertainty as an opportunity rather than a deterrent. Some 44% of the 150 family offices surveyed for The Wealth Report 2025 plan to increase their exposure to real estate over the next 18 months, compared to just 10% looking to scale back. The most sought-after sectors include the living sectors (14%), industrial and logistics (13%), and luxury residential (12%). Despite their optimism, family offices face hurdles in identifying reliable partners, navigating complex tax regimes, and competing for prime assets.
Nearly two-thirds of our respondents manage private family residential properties. The main objectives for this management are family use and legacy (44%), capital preservation (29%) and diversification (20%), with potential rental income coming in last at 7%.
On average, family offices managing residential property oversee 4.7 properties, ranging from five in Latin America to 4.2 in North America. Of those with an active family residential portfolio, 25% are considering the acquisition of property over the next 18 months, and 20% are considering a disposal of homes.
I’ll continue unpacking insights from The Wealth Report 2025 in the weeks ahead. You can download your copy here.
In other news...
Why uber-rich Americans are escaping to the UK (Times), Deloitte links office attendance to US tax staff bonuses (FT), and finally, global government borrowing set to hit record $12.3tn (FT).