THE NUMBER of Irish high-net-worth investors (HNWIs) – individuals with a net worth of more than $1 million excluding their family home and collectibles – dropped by 20 per cent in 2008 to 16,300, a new report shows.
The 2009 World Wealth Reportfrom investment bank Merrill Lynch and financial consultants Capgemini shows that the decline in the number of HNWIs in Ireland was greater than in Europe, where there was a drop of 14 per cent, but lower than in the UK where the figure was 26 per cent.
Economic contraction of 2.3 per cent in 2008, a 65 per cent drop in the market value of Iseq companies and house price declines of 11.9 per cent last year all reduced the net worth of Irish HNWIs.
Irish public finances “remain in a state of deep crisis”, said the report, which found the worth of HNWIs worldwide dropped 19.5 per cent to $32.8 trillion (€23 trillion) as their numbers fell 14.9 per cent to 8.6 million.
Ultra-high-net-worth individuals, whose net worth totals more than $30 million excluding their family home and collectibles, suffered heavier losses worldwide as their wealth fell 23.9 per cent.
The report concluded that the worth and number of wealthy individuals worldwide has fallen below 2005 levels due to the “exceptional volatility” last year, wiping out the growth of 2006 and 2007. Nick Tucker, managing director of Merrill Lynch’s global wealth management business, said that the net worth of Irish HNWIs started to decline in 2007 before their UK counterparts, but Ireland could recover more quickly as it was “smaller and more agile”.
The Government bank guarantee and recapitalisation plans were described as “drivers of wealth” as the measures would help HNWIs rebuild their wealth.
