US Edition
Billionaires made more through inheritance than entrepreneurship for the first time last year, according to one of the biggest global studies of the ultra wealthy.
The sons and daughters of moguls took in more from parental handouts than business people made from their companies, according to an annual report on billionaires compiled by the Swiss bank UBS.
Fifty-three heirs inherited $150.8bn between them last year, pulling in a larger haul than the 84 new self-made new billionaires who accumulated $140.7bn.
It comes as a generation of baby boomer entrepreneurs and investors begin to hand over their wealth to their family, either through inheritance or succession.
Billionaires who inherited their wealth last year include Red Bull heir Mark Mateschitz. He became Europe’s richest millennial after his father Dietrich’s passing in October last year. Mr Mateschitz, 31, inherited 49pc of the energy drink group and is now worth an estimated $20.5bn, according to Bloomberg.
Shapoor Mistry, the 59-year-old Indian businessman whose family owned 18.4pc of steel-to-property group Tata Sons, also inherited billions after the passing of his father, Pallonji, in June 2022. Mr Mistry is worth an estimated $32.3bn.
UBS’s figures show that so-called nepo babies are now entering the billionaire class.
The term nepo baby – short for nepotism baby – is used to describe people whose success is perceived to be helped by their famous parents.
The phrase has gained currency online and in the media in recent years and has been used to refer to celebrities including model Hailey Bieber, the daughter of actor Stephen Baldwin. Ms Bieber was pictured wearing a t-shirt with the phrase “nepo baby” on it earlier this year in reference to the discourse.
2022 marked the first time inheritance has been the biggest source of billionaire income in the near decade that UBS has been compiling its report on the world’s wealthiest people.
Maximilian Kunkel of UBS Wealth Management said it was only likely to grow as a source of income for the ultra wealthy.
Mr Kunkel said: “This great wealth transfer is something that has been anticipated for some time. It is likely going to gather momentum. More than 1,000 of the billionaires that are self made are expected to pass $5.2 trillion to the heirs over the next 20 to 30 years.”
Lorenzo Bertelli, the 35-year-old executive director of Prada, is among those in line for billion dollar hand-downs. He is the son of Miuccia Prada, granddaughter of the Italian fashion house’s founder, and Patrizio Bertelli, the former co-chief executive of Prada. The couple, both in their 70s, are estimated to be worth more than $10bn.
Other notable heirs include the five children of Bernard Arnault, the French luxury mogul behind Louis Vuitton-owner LVMH. Mr Arnault, 74, is the world’s third richest man with an estimated fortune of $166bn and has been grooming his children for succession at the business.
The number of billionaires in the world rose by 7pc to 2,544 last year, UBS said, while their combined wealth grew by 9pc to $12tn – equivalent to nearly five times the size of Britain’s economy.
Those with technology and healthcare investment have seen the greatest increases in their wealth over the past decade, the bank said.
Mr Kunkel said that the new generation of billionaires who were inheriting their wealth wanted to invest in green technology and healthcare, hoping to better the world.
The generational shift comes at a time of mounting political pressure on the billionaire class. In the US, President Joe Biden has proposed a 25pc wealth tax on billionaires.