Synopsis
This report is the result of WealthInsight’s extensive research covering the HNWI population and wealth management industry in South Africa. It provides market sizing and forecasts of local HNWI and UHNWI populations. The report also leverages WealthInsight’s HNWI Database, to provide key demographic breakdowns such as sector and city specific data.
Summary
South Africa has the highest number of HNWIs in Africa. In addition to providing a comprehensive and robust background of the local economy, including, uniquely, detailed analysis of economic and political risks to HNWI wealth creation, this report provides robust projections of the volume, wealth and asset allocation of local HNWIs and UHNWIs. The report then couches these findings in an analysis of the local Wealth Management and Private Banking sector, and the opportunities therein.
Scope
The report features:
• Independent market sizing of South African HNWIs across five wealth bands
• HNWI volume, wealth and allocation trends from 2007 to 2011
• HNWI volume, wealth and allocation forecasts to 2016
• HNWI and UHNWI asset allocations across 13 asset classes
• Number of UHNWIs in each city
• City wise breakdowns of UHNWI volumes and volume growth from 2007 to 2011, as well as 2016 forecasts
• Number of wealth managers in each city
• City wise ratings of wealth management saturation and potential
• Details of the development, challenges and opportunities of the Wealth Management and Private Banking sector in South Africa
• Size of local wealth management industry
• Largest private banks in South Africa by AuM
• Detailed wealth management and family office information
• Insights into the drivers of HNWI wealth
Reasons To Buy
• The WealthInsight Intelligence Center Database is an unparalleled resource and the leading resource of its kind. Compiled and curated by a team of expert research specialists, the Database comprises up to one hundred data-points on over 100,000 HNWIs from around the world. It also includes profiles on major private banks, wealth managers and family offices in each country. With the Database as the foundation for our research and analysis, we are able obtain an unsurpassed level of granularity, insight and authority on the HNWI and wealth management universe in each of the countries and regions we cover.
• Comprehensive forecasts to 2016.
• Detailed information on UHNWIs in each major city.
Key Highlights
• South Africa has the highest number of HNWIs in Africa. As of 2011, there were over 44,700 HNWIs in South Africa, with a combined wealth of US$188 billion, accounting for roughly 27% of South Africa’s total individual wealth (US$740 billion).
• The total number of HNWIs in South Africa increased by 17.9% during the review period (2007–2011), while HNWI wealth rose by 15.2%.
• The wealth of HNWIs in South Africa was positively influenced by a strong local property market, high savings rates and a significant appreciation of the South African rand against the US dollar over the review period.
• WealthInsight’s research shows that over 20% of South African HNWI wealth is held offshore. Most of this wealth is held in the UK, Switzerland and the Channel Islands.
Private Banking Industry in South Africa
Table of Contents
1 Introduction
2 Executive Summary
3 Wealth Sector Fundamentals
3.1 Political Background to South Africa
3.2 Economic Background to South Africa
3.3 Benchmarking South Africa’s Wealth in Context
3.3.1 Distribution of wealth
3.3.2 HNWI volume and wealth trends
4 Findings from the WealthInsight HNWI Database
4.1 Trends in HNWI Wealth to 2016
4.1.1 HNWI trend analysis
4.1.2 Trends of the wealth bands
4.1.3 Demographic Breakdown of HNWI
4.2 UHNWIs
4.2.1 UHNWI volume trend analysis
4.2.2 UHNWI wealth trend analysis
4.2.3 Per capita UHNWI trend analysis
4.2.4 Demographic breakdown of UHNWIs
4.2.5 UHNWIs – Job titles
4.2.6 UHNWIs – Industry breakdown
4.2.7 UHNWIs – Industry performance
4.2.8 UHNWIs – Breakdown by city
4.2.9 UHNWIs – City performance
4.2.10 UHNWIs – Population densities
4.2.11 UHNWIs – City forecasts
4.2.12 UHNWIs – Johannesburg
4.2.13 UHNWIs – Cape Town
4.2.14 UHNWIs – Durban and Pretoria
4.2.15 UHNWIs – Smaller cities
4.3 UHNWIs – Billionaires
4.3.1 Billionaire volume trend analysis
4.3.2 Billionaire wealth trend analysis
4.3.3 Billionaire per capita net worth trend analysis
4.3.4 List of billionaires
4.4 UHNWIs – Centimillionaires
4.4.1 Centimillionaire volume trend analysis
4.4.2 Centimillionaire wealth trend analysis
4.4.3 Centimillionaire per capita net worth trend analysis
4.4.4 List of top centimillionaires
4.5 UHNWIs – Affluent millionaires
4.5.1 Affluent millionaire volume trend analysis
4.5.2 Affluent millionaire wealth trend analysis
4.5.3 Affluent millionaire per capita net worth trend analysis
4.6 Core HNWIs
4.6.1 Core HNWI volume trend analysis
4.6.2 Core HNWI wealth trend analysis
4.7 Core HNWIs – Mid-tier millionaires
4.7.1 Mid-tier millionaire volume trend analysis
4.7.2 Mid-tier millionaire wealth trend analysis
4.7.3 Mid-tier millionaire per capita net worth trend analysis
4.8 Core HNWIs – Lower-tier millionaires
4.8.1 Lower-tier millionaire volume trend analysis
4.8.2 Lower-tier millionaire wealth trend analysis
4.8.3 Lower-tier millionaire per capita net worth trend analysis
4.9 South Africans living in the UK
5 Analysis of South African HNWI investments
5.1 Analysis by Asset Class
5.1.1 Changing trends in liquid assets (equity, fixed income and cash and deposits)
5.1.2 Trends in alternative assets
5.1.3 Trends in “art, wine and wheels”
5.1.4 Trends of investments in real estate
5.1.5 Trends of investments in cash and deposits
5.1.6 Trends of investments in fixed income
5.1.7 Trends of investments in equity
5.1.8 Trends of investments in business interests
5.2 Analysis of Foreign Investments
5.2.1 Trend of investments in Europe
5.2.2 Trend of investments in North America
5.2.3 Trend of investments in the rest of Africa
5.2.4 Trend of investments in Asia-Pacific region
5.2.5 Trend of investments in Latin America
5.2.6 Trend of investments in the Middle East
5.3 Analysis of South African UHNWI investments
6 The Wealth Sector in South Africa
6.1 Competitive Landscape
6.1.1 Private banks
6.1.2 Wealth managers
6.1.3 Family offices
6.1.4 Wealth advisors
6.1.5 Wealth management in each city
6.2 Fund management in South Africa
6.3 South African Wealth Management Industry – Clientele Model and Maturity
6.4 Behavioral Mapping of Wealth Management Industry in South Africa
6.5 Porter’s Five Force Analysis – Wealth Management Industry in South Africa
6.6 Other Financial Services Review
6.6.1 Retail banks
6.6.2 Private equity and hedge funds
7 Appendix
7.1 Additional Components of the Wealth Sector in South Africa
7.1.1 Philanthropy
7.1.2 Black Economic Empowerment (BEE) and ‘Previously Disadvantaged Groups’
7.2 Regulatory Environment in South Africa
7.2.1 Exchange controls
7.2.2 Banking regulations
7.2.3 Regulations on taxes
7.2.4 Regulations on property and inheritance
7.3 Additional background of South Africa
7.4 Key Economic Trends and Drivers
7.4.1 LC to USD exchange rate
7.4.2 Real GDP growth
7.4.3 GDP per capita
7.4.4 Domestic market capitalization
7.4.5 Housing price indices
7.4.6 Commodity index
7.4.7 Foreign direct investment
7.4.8 Foreign institutional investments (FIIs) in equity products
7.4.9 Inflation rate
7.4.10 Interest rate
7.4.11 Balance of payments
7.4.12 Government debt
7.4.13 Stock market performance
7.5 Wealth breakdowns
8 About WealthInsight
List of Tables
Table 1: HNWI wealth band and group definitions
Table 2: Major regions in South Africa, 2011
Table 3: HNWIs – Volume Distribution Wealth Pyramid, 2011
Table 4: HNWIs – Wealth Distribution Wealth Pyramid (% share), 2011
Table 5: UHNWIs – Top Sectors for UHNWIs in Major Cities, 2011
Table 6: UHNWIs – Top South African Cities for UHNWIs, 2011
Table 7: UHNWIs – UHNWI Population Density in Major Cities, 2011
Table 8: UHNWIs – UHNWI Growth Rates for Top Cities, 2007–2016
Table 9: UHNWIs – Johannesburg, UHNWIs by Suburb, 2011
Table 10: UHNWIs – Cape Town, UHNWIs by Suburb, 2011
Table 11: UHNWIs – Durban, UHNWIs by Suburb, 2011
Table 12: UHNWIs – Pretoria, UHNWIs by Suburb, 2011
Table 13: UHNWIs – Other Hotspots, 2011
Table 14: UHNWIs – Large Cities with Low Numbers of UHNWIs, 2011
Table 15: UHNWIs – Billionaires – Market Overview, 2007–2016
Table 16: Billionaire List, 2011
Table 17: UHNWIs – Centimillionaires – Market Overview, 2007–2016
Table 18: Top Centimillionaire List, 2011
Table 19: UHNWIs – Affluent Millionaires – Market Overview, 2007–2016
Table 20: Core HNWIs – Mid-Tier Millionaires – Market Overview, 2007–2016
Table 21: Core HNWIs – Lower-Tier Millionaires – Market Overview, 2007–2016
Table 22: HNWIs – HNWI Holdings Growth (%), 2007–2016
Table 23: HNWIs – Liquid Asset Composition (%), 2007–2016
Table 24: HNWIs – Trends of Investments in Alternative Assets (%), 2007–2016
Table 25: HNWIs – Alternative Asset Composition (%), 2007–2016
Table 26: HNWIs – Trends in “Art, Wine and Wheels”, 2007–2011
Table 27: HNWIs – Local Residential Cities, 2007–2011
Table 28: HNWIs – Foreign Real Estate Investment in South Africa, 2007–2016
Table 29: HNWIs – City office prices per square meter
Table 30: HNWIs – Prime International Cities, 2007–2011
Table 31: HNWIs – % Foreign allocation, 2007–2016
Table 32: UHNWIs – Allocations and Share of HNWI Assets, 2011
Table 33: The Largest Private Banks in South Africa, 2011
Table 34: Local Wealth Managers, 2011
Table 35: Foreign Wealth Managers Operating in South Africa, 2011
Table 36: Wealth Advisors in South Africa
Table 37: Wealth Management Companies Per City, 2011
Table 38: The largest fund managers in South Africa, 2010
Table 39: Tax Structure for Individuals in South Africa
Table 40: LC to USD Exchange Rate, 2006–2016
Table 41: Real GDP Growth, 2006–2016
Table 42: GDP Per Capita, 2006–2016
Table 43: Domestic Market Capitalization, 2006–2011
Table 44: Housing Price Index, 2006–2011
Table 45: Commodity Indices, 2006–2016
Table 46: Foreign Direct Investments, 2006–2016
Table 47: Investments of FIIs in Equity Products, 2006–2010
Table 48: Inflation rate, 2006–2016
Table 49: Money Market Rate, 2006–16
Table 50: Balance of Payments, 2006–2011
Table 51: Government Debt to GDP, 2006–2016
Table 52: Stock Market Performance, 2006–2011
Table 53: HNWI Wealth to GDP Ratio, 2007–2016
Table 54: Appendix One
Table 55: Appendix Two
List of Figures
Figure 1: HNWI wealth band definitions
Figure 2: Map of South Africa
Figure 3: Asset Price Performance, 2007–2011
Figure 4: South African HNWI Performance, 2007–2016
Figure 5: HNWI – South Africa vs The World
Figure 6: HNWIs – Growth Factor Correlation, 2007–2011
Figure 7: HNWIs – Volume Distribution Wealth Pyramid, 2011
Figure 8: HNWIs – Wealth Distribution Wealth Pyramid (% share), 2011
Figure 9: HNWIs – Age Distribution, 2011
Figure 10: UHNWIs – Wealth Share Vs Volume Growth, 2007–2011
Figure 11: UHNWIs – Volume by Wealth Band, 2007–2016
Figure 12: UHNWIs – Wealth by Wealth Band (in US$ billion), 2007–2016
Figure 13: UHNWIs – Age Distribution (% Share), 2011
Figure 14: UHNWIs – Racial Distribution, 2007–2011
Figure 15: UHNWIs – Job Titles, 2007–2011
Figure 16: UHNWIs – Distribution by Industry, 2011
Figure 17: UHNWIs – Sector Performance, 2007–2011
Figure 18: UHNWIs – City Performance, 2007–2011
Figure 19: UHNWIs – Regional Forecasts, 2011–2016
Figure 20: UHNWIs – Billionaires – Market Overview, 2007–2016
Figure 21: UHNWIs – Centimillionaires – Market Overview, 2007–2016
Figure 22: UHNWIs – Affluent Millionaires – Market Overview, 2007–2016
Figure 23: Core HNWIs – Mid-Tier Millionaires – Market Overview, 2007–2016
Figure 24: Core HNWIs – Lower-Tier Millionaires – Market Overview, 2007–2016
Figure 25: Non-Domiciled UHNWIs Living in UK – Country-Wise Share, 2011
Figure 26: HNWIs – Asset Class Composition, 2007–2016
Figure 27: HNWIs – Trends in Total Liquid Assets (as a Percentage of Total Assets), 2007–2016
Figure 28: HNWIs – Liquid Assets Composition (US$ billion), 2007-16
Figure 29: HNWIs – Trends of Investments in Alternative Assets (in US$ billion), 2007–2016
Figure 30: HNWIs – Trends in “Art, Wine and Wheels”, 2007–2011
Figure 31: HNWIs – Foreign Investment Allocation and Growth by Asset Class (%), 2011–2016
Figure 32: HNWIs – Global Distribution of Foreign Investments, 2007–2016
Figure 33: UHNWIs – Asset Class Composition, 2007–2016
Figure 34: Wealth Management Industry – Maturity Level Of Players
Figure 35: South African Wealth Management Industry – Behavioral Mapping, 2011
Figure 36: Wealth Management Industry in South Africa – Five Forces Analysis
Figure 37: LC to USD Exchange Rate, 2006–2016
Figure 38: Real GDP Growth (%), 2006–2016
Figure 39: GDP Per Capita, 2006–2016
Figure 40: Domestic Market Capitalization, 2006–2011
Figure 41: Housing Price Index, 2006–2011
Figure 42: Commodity Indices, 2006–2016
Figure 43: Foreign Direct Investments, 2006–2016
Figure 44: Investments of FIIs in Equity Products, 2006–2010
Figure 45: Inflation rate, 2006–2016
Figure 46: Money Market Rate, 2006–2016
Figure 47: Balance of Payments, 2006–2011
Figure 48: Government Debt to GDP, 2006–2016
Figure 49: Stock Market Performance, 2006–2011
Figure 50: HNWI Wealth vs GDP Ratio, 2007–2016
Figure 51: HNWIs – Volume by Wealth Band, 2007–2016
Figure 52: HNWIs – Wealth by Wealth Band (in US$ Billion), 2007–2016
Figure 53: HNWIs – Per Capita Net Worth (US$ million), 2007–2016
Companies mentioned
Absa Wealth (Barclays)
Investec Wealth & Investment
Standard Bank
Nedbank (Old Mutual)
RMB (FirstRand)
UBS
Sanlam
BoE Private Clients
Belmont Asset Management
Cheryl Howard and Associates
Investment Solutions Limited
K2 Capital
NFB Private Wealth Management
VFS Wealth Managers
Credo Group
Fairbairn (owned by Old Mutual)
Kleinwort Benson
Sable Wealth Management
Stenham
