This Friday marks the first day of the Year of the Horse in the Chinese lunar calendar.
Information analyzed by Wealth-X, a research firm, shows that those born in the Horse Year are the most highly educated among ultrahigh-net-worth individuals. Those in this group, who have about $30 million or more in assets, also donate more to educational causes than any other zodiac sign.
Plus, the Year of the Horse has the highest percentage of self-made UHNW individuals, of all the 12 Chinese zodiac signs.
For instance, self-made millionaire Wenliang Wang, founder of China Rilin Construction Group, was born in 1954 and is estimated to be worth $620 million. Wang is involved in several philanthropic projects at New York University and the National University of Singapore.
After a challenging Year of the Snake, the consulting and research group Wealth-X shares its eight predictions for China’s ultrahigh-net-worth investors over the next 12 months:
1. Jump in $500 Million Group
The population of Chinese UHNW individuals with net worth above $500 million will grow by almost 6% to 535 individuals, while the growth of the overall Chinese UHNW population is expected to stagnate. In 2013, the UHNW population in China included 10,675 individuals—down from 11,245 people in 2012, a drop of 5%.
2. Growth in UHNW Wealth
Chinese UHNW individuals with net worth in excess of $500 million will experience 4% growth in wealth to $630 billion. Total Chinese UHNW wealth is expected to increase by 2% in 2014 to $1.545 trillion. This figure declined by 4% in 2013 to $1.515 trillion, as economic growth weakened from expected levels, export growth declined and the stock market fell accordingly.
3. Growing UHNW Liquidity
The liquidity of the average Chinese UHNW individual will increase from 12% to nearly 14% of net worth, as some people move between wealth tiers and chose to hedge against potential economic difficulties. Still, Chinese UHNW individuals’ liquidity remains low vs. average liquidity of UHNW individuals worldwide, with 25% of their net worth in liquid assets.
4. China’s UHNW to Top Japan’s
Despite some weakness 2013, China's total UHNW population and wealth are expected to top Japan's by 2026, the next Year of the Horse. Research estimates that in 12 years, China’s UHNW demographic group could be worth some $4.2 trillion vs. $3.3 trillion for its Japanese counterpart.
5. More Shopping Overseas
In 2014, 18% more of Chinese UHNW individuals' luxury spending will be done outside Greater China (i.e. China, Taiwan and Hong Kong), primarily in American and European markets, than in 2013. Overall, the Chinese are already the world's biggest shoppers abroad, and research indicates that the number of Chinese outbound tourists could double to 200 million people by 2020, when their projected spending should triple.
6. Expanding Corporate Culture
The proportion of Chinese UHNW individuals deriving their wealth from industrial conglomerates will increase from 5.5% in 2013 to 6.5% in 2014. This should take place through a growing diversification in corporate holdings on the part of UHNW investors.
7. Time to Travel
Those born in the Year of the Horse tend to be avid travelers. As Chinese UHNW individuals are likely increase the frequency of their business and leisure travel in 2014, Wealth-X expects to see China’s private jet market for UHNW individuals expand by 30%.
8. More UHNW to Live Overseas
Currently, only 1,050 of China’s roughly 10,700 UHNW individuals reside outside Greater China. This population should grow by 8% this year to 1,135, as uncertainty over government policies, risky real-estate markets, problematic debt issues for many Chinese banks and environmental pressures trigger the decision by some Chinese-born entrepreneurs and business leaders to move from China to other locations.
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Check out World’s Top 10 Cities of the Super Rich: 2013 on ThinkAdvisor.
AP/Shiho FukadaActivist investor Carl Icahn loves to give advice to public companies. But this week, his advice for eBay felt a couple of years behind the curve. Companies can make brilliant moves, but there are also times when things don't work out quite as planned. From a classy handbag maker carrying its latest financials to market, to a blowout report by the leading streaming video service, here's a rundown of the week's best and worst in the business world. Netflix (NFLX) -- Winner Netflix was last year's top performer among S&P 500 stocks, and it's off to another strong start in 2014. Shares of the leading video service hit another all-time high this week after it posted blowout quarterly results. Netflix closed out the year on a strong note with more than 44 million streaming subscribers worldwide and expanding profit margins. It expects to top 48 million streaming members by the end of March. Strong financial results naturally make you a winner, but Netflix also got the market excited by announcing that it will soon offer a variety of pricing plans. More importantly, it's suggesting that it may eventually increase the price of its basic $7.99 a month plan. Coach (COH) -- Loser Luxury handbags are still selling, but Coach totes aren't faring as well. The iconic maker of high-end purses and accessories posted disappointing quarterly results on Tuesday. Sales declined by 6 percent during the seasonally potent holiday quarter, and net income took an even bigger hit. Foreign currency translations weighed on the results, but sales still would have been lower if there weren't any currency fluctuations. Coach investors shouldn't be surprised. Sales, net income, and store-level comparable sales also slipped three months earlier. It's not the niche. Michael Kors (KORS) has been able to post healthy double-digit growth through the gradual fade in prominence at Coach. Beats Music -- Winner Music streaming has become popular, and that's big for the music industry. CD sales peaked more than a decade ago, and last year was the first year that we saw MP3 sales decline. Royalties from streaming music is a big driver for the industry these days, and on Tuesday we saw the debut of Beats Music. Beats Music is notable because of its celebrity execs. Dr. Dre, Nine Inch Nails' Trent Reznor, and iconic music producer Jimmy Iovine are some of the big names behind this platform, which aims to raise the bar by providing curated playlists based on highly customized preferences. It's not a free service, though naturally it's kicking things off with free trials. Beats Music is also teaming up with AT&T (T) to offer a discounted family plan for AT&T Wireless customers. That's one way to stand out in a crowd. Carl Icahn -- Loser Billionaire activist investor Carl Icahn took aim at eBay (EBAY) earlier this week, arguing that the online marketplace giant would be better off it if spun off PayPal. It's true that PayPal is the star at eBay. It has been for years. However, this suggestion would've made more sense a couple of years ago when eBay.com was struggling. Shortly after Icahn's suggestion, eBay reported healthy double-digit growth at both PayPal and its marketplace division. Yes, PayPal's 19 percent pop in revenue is better than the marketplace's 12 percent advance. However, Icahn is going to have a hard time convincing the market that eBay should divest itself of PayPal at a time when its two primary businesses are holding up just fine. On the bright side, Icahn also disclosed that he increased his stake in Apple (AAPL) by $500 million. That's not a bad idea at a time when Apple is getting ready to report quarterly results next week. Analysts see this as the first quarter in nearly a year that Apple grows its revenue and earnings per share. Chili's -- Winner Casual dining has had a rough holiday quarter. Between December's wintry blasts and the growing popularity of fast casual chains, traditional table service restaurants have been struggling lately. Brinker International's (EAT) bucked the trend by posting sales growth, positive comps, and expanding profit margins. These are three things that investors didn't see at Red Lobster or Ruby Tuesday (RT) in recent weeks. As a welcome bonus, Brinker's smaller Italian concept -- Maggiano's Little Italy -- posted another period of positive comps. The family-style restaurant has come through with 16 consecutive quarters of positive comparable restaurant sales growth. At least some of the casual dining chains are still cooking.