Swiss banking powerhouse UBS is setting its sights on significant expansion in the United States. This strategic move is part of their ambitious goal to accumulate $150 billion in new funds annually.
Iqbal Khan, the chief of UBS’s asset management division, shared this vision in a recent interview, revealing plans to invest heavily in the U.S. market over the next three years.
UBS, already the fourth-largest asset manager in the United States, is gearing up to deepen its roots and broaden its influence in this key financial landscape.
A Shift in Wealth Dynamics
The landscape of wealth and asset accumulation is undergoing a notable shift. UBS’s research highlights a striking trend: for the first time in nine years, more of the global super-rich have acquired their wealth through inheritance rather than self-made endeavors.
In 2023, self-made billionaires globally added $141 billion to their coffers, while heirs to existing fortunes inherited a staggering $151 billion.
This trend, as pointed out by Benjamin Cavalli, head of UBS’s global wealth management strategic clients, signals a significant change in the source of billionaire wealth.
This shift is part of a broader pattern known as the ‘great wealth transfer.’ This phenomenon, particularly pronounced in regions like Europe, is seeing a considerable transfer of assets from older generations to younger heirs.
The transfer is not just in monetary terms but also in the type of assets preferred by different generations.
Older billionaires are showing a tendency towards income-generating assets like fixed income and private credit, whereas the younger generation leans more towards public and private equity, driven by long-term risks and innovation prospects.
Navigating a Complex Wealth Landscape
The changing wealth landscape brings its own set of challenges and opportunities. UBS’s study reveals that 62% of billionaires consider geopolitics their primary business concern, overshadowing fears of inflation or a potential U.S. recession.
This concern varies between generations, with the first-generation wealthy more focused on immediate threats like economic downturns, while their successors eye long-term geopolitical shifts.
These dynamics are reflective of a larger narrative where wealth creation is becoming increasingly challenging in a world marked by high interest rates and economic uncertainties. This notion is echoed by Matthew Fleming, a partner at Stonehage Fleming, who observes a possible end to the era of great wealth creation.
Fleming notes that geopolitics is increasingly influencing investment decisions of ultra-high-net-worth individuals, with younger heirs more inclined towards assessing the societal impact of their investments.
As UBS pushes forward with its expansion plans in the United States, it navigates a complex environment shaped by these shifting wealth patterns.
The bank’s focus on adapting to these changes, while catering to the diverse needs of different generations of wealth holders, will be crucial in its quest to secure a larger share of the U.S. market.
The transition of wealth from one generation to the next, coupled with evolving investment preferences and global uncertainties, makes UBS’s journey in the United States a fascinating one to watch.
With their commitment to expansion and adaptation, UBS stands poised to redefine its role in the ever-changing world of global finance.
