The super-rich also cry as billionaire numbers drop

Wainaina Wambu  Six Kenyans have been kicked out of the billionaires’ club due to a harsh economy experienced in the last one year. According to a new wealthy report, 500 Kenyans can no...
longer boast of being dollar millionaires (having between Sh100 million and 900 million).

 The Knight Frank Wealth Report Attitudes Survey 2020, which tracks how the rich spend and invest their money, shows that for the first time in five years, the extremely wealthy individuals in the country have significantly lost the value of their assets. Knight Frank Kenya Managing Director Ben Woodhams attributed the fall in the wealth value to the tough economic climate witnessed in 2019. “The economic downturn saw their assets lose value and consequently fall out of those categories,” he told The Standard after the release of the wealth report in Nairobi yesterday.

The biggest increases in investments for the super-wealthy were in equity investments through the stock market and in private equity investments. In 2019, the benchmark index for the 20 best performing counters at the Nairobi Securities Exchange dropped by 6.3 per cent compared to the previous year perhaps explaining where some of them lost their wealth. The report shows that wealth distribution numbers of the billionaires or Ultra-High-Net-Worth Individuals (UHNWIs) those with Sh3 billion ($30 million) and above, has reduced from 48 in 2018 to 42 in 2019.

The numbers of these UHNWIs in the country has been sharply rising. In the last five years, it recorded an increase of 163 per cent with the numbers having been 16 in 2014. The dollar millionaires, also known as High-Net-Worth-Individuals (HNWIs) with a wealth of Sh100 million ($1 million) have also significantly fallen, having stood at 800 in 2014. In 2018, they stood at 3,399 and dropped to 2,900 in 2019. However, their number has grown by 263 per cent in the last five years on average.

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The dollar millionaires are expected to increase by 16 per cent in the next five years. Woodhams, however, said that the economy would recover hence the projected growth of their numbers in the two categories. According to the report, there are 513,244 UHNWIs globally and are expected to grow by 6.4 per cent in the next five years.

Kenya is number 113 globally. South Africa tops African rankings of UHNWIs with 1,033 individuals, followed by Nigeria with 724. Morocco is ranked third with 215. The report says Kenya’s wealthy have identified healthcare and retirement property as the most interesting areas for commercial real estate investment. In a survey of wealth managers across Kenya, 27 per cent said their clients had their eyes on the property.