New Billionaires Are Inheriting More Wealth Than Creating It — And Shaking Up Portfolios

Over the coming decades, about a thousand billionaires will pass on an estimated $5.2 trillion and the inheritors have their own plans for those assets.


Over time the various lists of billionaires evolve but this year the primary origin of their tremendous wealth has suddenly changed.

Now, more billionaires are fortune inheritors instead of creators, and those younger generations have new plans for the assets they are taking ownership of.

A tiny group of 53 people inherited a total of $150.8 billion over a 12-month period that ended in April, exceeding the 84 new self-made billionaires’ total of $140.7 billion, according to the 2023 UBS Billionaire Ambitions report published Thursday. (UBS surveyed 79 billionaires for its report and estimates there were 2,544 globally at the time, 7 percent more than the previous study.) It was the first time the sum inherited was larger since UBS began publishing the report nine years ago.

The reversal piqued the interest of UBS, Charles Otton, the bank’s head of global family and institutional wealth in the Americas, told Institutional Investor. The Swiss bank works with many entrepreneurs around the globe in need of business loans or investment banking services on their way to becoming billionaires. But its wealth management unit — which helps families grow and preserve their riches — hopes it also will benefit from the transfer of assets that is now beginning.

“Self-made billionaires are equally interesting and important to us, but they tend to come from transactions and maybe another part of UBS. We like helping somebody become the owner of the fruits of their labor. And if they’ve done that, then we have some interesting things that we can do, particularly if they set up a family office that helps them diversify and grow that set of assets,” Otton said.

Billionaires by way of inheritance are only going to increase. Over the next 20 to 30 years, UBS expects more than a thousand billionaires to pass an estimated $5.2 trillion to their children. Even to a professional like Otton, who spends his days working with ultra rich families, “that’s a lot of money.”

What newly minted billionaires are doing with those assets is also noteworthy, according to UBS.

“This coming generation has fresh views about business, investment, and philanthropy. Many are redirecting the large pools of private wealth they control to new business opportunities arising from the times we live in. Others are stepping away from their families’ businesses, choosing careers more suited to their individual ambitions and talents,” Benjamin Cavalli, head of global wealth management strategic clients, said in the UBS report.

The inheritors are also investing differently than the self-made, first-generation billionaires. Among other things, inheritors are more interested in private equity, which already accounts for an average of 20 percent of their portfolios. UBS found that 63 percent of billionaires in the Americas plan to increase their investments in private equity, which Otton described as “a strong bias” toward the asset class.

“The first generation isn’t actually as excited about private equity exposure as the second generation is. And that’s perfectly rational because, in many cases, the ‘private equity investment’ that the first generation tends to have is their own [business],” Otton said.

Those different types of exposures to private equity each come with their own risks and rewards. Inheritors are more willing to invest in PE because that allocation is ususally more diversified. They are also prepared to take more risk “because the money’s created and they’re looking for an extra source of juice,” Otton added.

Client preferences are only going to change more as a massive wealth transfer looms.

“It’s a material fact, and I think it will lead to a different set of concerns surfacing in the coming years,” Otton said about the aging billionaires. “Some of these more wealth-management issues rather than wealth-creation issues will be top of mind for the billionaire universe.”