France may have the highest level of overall wealth in Europe with $12.1 trillion, ahead of Germany ($11 trillion) and the UK ($10.9 trillion) but it has been deeply affected by the ongoing financial crises since 2008. French stock markets have declined leading to the number of French HNWIs dropping by 12.8% between 2007 and 2011, leading to a plunge of 16.4% of the HNWI combined wealth.
In 2011, France had over 550,000 high net worth individuals (HNWI). With a combined wealth of $2.0 trillion, they represent around 16% of the country’s total wealth.
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Of this figure there are 3,799 ultra high net worth individuals (UHNWI) are in France. Their average wealth is $138 million with a combined wealth of $524 billion. Those figures also decreased between 2007 and 2011, by 12.8% and 13.1% respectively.
The average French UHNWI is 62-yearold, most of them made their wealth through retail & fashion or fast moving consumer goods (FMCG). Those two sectors are respectively the source of wealth for 17.7% and 14.2% of UHNWI in France. Between 2007 and 2011, UHNWI who acquired their wealth in retail and fashion declined by 9% while those who made their fortune in basic materials rose by 18%.
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By GlobalDataIn 2011, nearly one quarter (24.8%) of HNWI’s wealth was held outside France. This represents not less than $496 billion and this trend is expected to increase to reach 26.6% of the amount of total assets by 2015.
Europe largely makes up the most of the foreign assets with 60% of the total (although slightly on the decline compared to 2007 and its 61%). North America comes next but is still way behind with 20%, followed by Asia Pacific (9.3%) and Latin America (6.8%).
By 2015, the share of assets HNWI held in Europe is expected to drop to 58% while their assets in Asia Pacific will grow to reach
11.7%. The attraction of Asia Pacific was already impacting the 2011 figures as this region was only representing 6% of foreign holdings in 2007. The increase was due to investments in Hong Kong and Singapore.
Trends in assets sectors
Assets under management in the French private banking industry stood at $1.4 trillion
in 2011, with UHNWI accounting for 71% of this amount at $1.0 trillion. In 2011, French HNWI mostly focused their assets in real estate (24% of total assets). The sector is closely followed by fixed income (22%), business interests (20%) and equities (19.8%). Cash and alternatives assets complete the list, making up only 7.5% and 6.5% respectively of the total assets.
By 2015, assets classes are expected to move away from real estate and towards alternatives and fixed income.
The current leading sector will then be relegated to second place, making up 21% of total assets while fixed income will represent 24. Business interests will closely follow with 20.6% and equities, 19.4%. Cash and alternatives assets will evolve only slightly, to 7.8% and 7.2% respectively.
Private banks leading the wealth management sector Private banks manage 65% of the total amount of assets under management in France. This represents $920 billion while wealth managers and family offices together manage 35%, which represents $490 billion.
Paradoxically, there are only 52 private banks in the country whereas France counts 562 wealth managers and around 100 family
offices.
As a result of gathering most of the UHNWI population, Ile-de-France is also the department that dominates the wealth management sector with 83% of the total wealth managers offices. Rhône-Alpes comes a distant second with 5.5%.
A positive prospect nonetheless
Over the forecast period, between 2012 and 2015, the total wealth of French HNWI is expected to grow by 12.2% to reach $2.2 trillion in 2015. The number of HNWI is also set to increase by 9.1%, to 606,000 individuals.
This trend will also apply to the population of UHNWI who is expected to grow by 9.7% by 2015, to reach 4,168 individuals.
All this growth, however, will hinge on the recovery of the French economy. The impact of French laws targeting the wealthy – could also contribute to a downward slide of French HNW individuals and overall wealth.
