8 PREDICTIONSFOR THE YEAR OF THE GOAT

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CONTEXT

On February 19th 2015, the year of the Green Wooden Goat will begin on the Chinese calendar. As we prepare to enter this New Year, Wealth-X presents its predictions for China’s ultra high net worth (UHNW) population in the coming year.

The Goat is the eighth sign of the Chinese Zodiac and is known for its determined and dependable personality. 8.4% of the world’s UHNW population is born in the year of the Goat, making it the fourth most common Zodiac sign among the world’s ultra wealthy - behind Rabbit, Horse and Monkey. Almost half of all Goat UHNW individuals are located in the United States and 7% are based in China, despite these locations accounting for 33% and 5% of the total UHNW population globally.

Compared to UHNW individuals with other Chinese Zodiac signs, Goat UHNW individuals have the lowest proportion of fully self-made UHNW individuals, with only 61%, less than the Pig UHNW population, which is 66% fully self-made. Goat UHNW individuals are 10% wealthier than the global average for UHNW individuals, with an average net worth of US$155 million, ranking third behind Dragon and Ox UHNW individuals. Goat UHNW individuals are most likely to work in finance, banking & investment, with 19% of them involved in this

sector. Technology is the fifth most common sector for Goat UHNW individuals, with almost 6% having made their fortunes through this sector, higher than the global average of 4.6%.

Goat UHNW individuals share specific interests, with sports - particularly golf and skiing - ranking as the most common hobby for 57% of these individuals.

The last year of the Goat started on February 1st 2003 and ended January 21st 2004. During that year, the UHNW population grew by 12% and the combined wealth of this population increased by a staggering 20%, a faster growth rate than any other year since 1992. This strong performance was echoed in the S&P 500, which grew 33.4% during the last year of the Goat. That same year, however, also saw the onset of the SARS epidemic, as well as ongoing turmoil in the Middle East. In China, Hu Jintao became prime minister and the country had its first manned mission in space. China’s GDP grew at a rapid clip of around 9%, and within the next twelve years the country went from the sixth largest economy in the world to the second. In this report, we will explore eight key developments we expect to see in China during this year of the Goat.

PREDICTIONS

1 SOCIAL MOBILITY TO BOOST UHNW POPULATION

The size of the “bottom” tier of China’s UHNW population — those with a net worth between US$30 million and US$49 million — will grow by 8.5%, twice as fast as the rest of the country’s UHNW population this year, as China’s growing middle class seize opportunities domestically and abroad and as social mobility increases.

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2 UHNW WEALTH TO GROW FASTER THAN POPULATION

The combined net worth of China’s UHNW individuals will grow by 5.2%, due to a strong performance across all UHNW wealth tiers — creating an additional US$80 billion of UHNW wealth in the country.3 FLOWS OF UHNW WEALTH

OUTSIDE CHINA

As China’s crackdown on conspicuous consumption continues and controls over financial movement out of China are reduced, Chinese UHNW individuals will invest on average 5% more of their net worth in foreign businesses, amounting to an additional US$7 million per individual.4 TIER 1 CITIES TO INCREASE

IN RELEVANCE

Currently, 55% of China’s UHNW population is based in China’s four first tier cities of Beijing, Shanghai, Shenzhen and Guangzhou. Over the coming year, as China continues to experience uncertain economic conditions, we expect this proportion to grow to 60%, as those UHNW individuals from smaller cities move to the larger and more stable ones.

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7 PHILANTHROPIC ATTITUDES TO INCREASE

The year of the Goat will bring with it an increase in focus on private foundations within China’s UHNW population. Currently, only 2% of Chinese UHNW individuals are involved in a private foundation. Within the next twelve months, we expect to see a 24% increase in the number of private foundations in China that are set up by UHNW individuals, as philanthropy becomes increasingly important in Chinese society.

8 CHINA TO ATTRACT FOREIGN UHNW INDIVIDUALS

In the year of the Goat, China will become more attractive to UHNW individuals from around the globe. Only 2% of China’s current UHNW population, or 200 individuals, were born outside of mainland China. In this year of the Goat, we expect to see this group of individuals grow by 40% to 280 individuals.

5 PUBLIC WEALTH TO GROW FASTER THAN PRIVATE

As China’s private banking sector emerges and as cooperation between the stock exchanges of Shanghai and Hong Kong continues, we expect to see a increase in the number of Chinese UHNW individuals’ private businesses going public. In this Year of the Goat, we expect to see an additional US$45 billion held in public companies, compared to just US$20 billion in private companies.6 LUXURY SPENDING TO

DECREASE OVERALL

In the year of the Horse, Chinese UHNW individuals spent, on average, US$1.3 million on luxury — from travel to apparel and jewellery — but only 20% of that spending occurred within mainland China. In this coming year, we expect to see a slight contraction of 4% in Chinese UHNW luxury spending globally, but an increase in domestic luxury spending, with 25% of luxury spending occurring within mainland China.

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ABOUT WEALTH-X INSTITUTE

Using the wealth of data collected by Wealth-X’s team of researchers, Wealth-X Institute quantitatively analyses the UHNW population. Variables that can be used in determining clusters and market size include asset analysis, wealth source, net worth, liquid assets, source of wealth, education, interests, age, gender, marital status, and location. This analysis provides valuable insights that can then be identified and explored for a variety of purposes.

Wealth-X Institute provides leaders and decision makers in the private banking, luxury, and philanthropy sectors with data and insights to help them make informed decisions. By bringing internal and external thought leaders together, the Wealth-X Institute illuminates issues that matter to these stakeholders today, as well as those that will in the future.

For the last three years, Wealth-X has published an annual report: the World Ultra Wealth Report. Since 2013, this report has been published in partnership with UBS. 2013 also saw the publication of the inaugural Wealth-X and UBS Billionaire Census Report.

In 2014, Wealth-X partnered with Arton Capital to launch the inaugural Philanthropy Report, while 2015 has seen the launch of The Global Luxury Residential Real Estate Report with Sotheby’s International Realty and the Family Wealth Transfers Report in partnership with NFP.

In addition to these reports, Wealth-X institute publishes insights on UHNW individuals across the financial services, luxury and non-profit sectors.

PARTNERSHIPS

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ABOUT WEALTH-X

Wealth-X is the world’s leading ultra high net worth (UHNW) intelligence and prospecting firm with the largest collection of curated research on UHNW individuals, defined as those with net assets of US$30 million and above. The firm’s Wealth-X Professional solution is the standard for financial institutions, not-for-profit organisations and luxury brands working with the ultra affluent.

Headquartered in Singapore, Wealth-X has 13 offices on five continents.

For more information, contact press@wealthx.com

WEALTH-X AND UBS BILLIONAIRE CENSUS 2014http://www.billionairecensus.com

WEALTH-X AND UBS WORLD ULTRA WEALTH REPORT 2014http://www.worldultrawealthreport.com

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