The global wealth bounce

Did Australia miss out on the great global wealth bounce? That’s one way to interpret new research from Boston Consulting Group, which shows the increase in Australian wealth was bettered by every region of the globe in 2010, with the exception of Western Europe.

According to the research, Australia’s wealth increased 5% in 2010 dollars to $US2.34 trillion, faster than in Western Europe (which grew 4.8%) but well behind Asia-Pacific (excluding Japan), North America (10.2%), the Middle East (up 8.6%) and Latin America (8.2%).

The number of ultra-high-net-worth households in Australia (defined as those households with personal wealth of more than $100 million) increased from 219 to 231, while the number of millionaire households increased from 97,798 to 132,710.

Australia ranked 17th on the total millionaires – well below our regional neighbours Singapore, Hong Kong, China and Japan.

The leader of BCG’s financial services practice in Australia, Matthew Rogozinski, says that the main driver of the relatively sluggish growth in Australian wealth was the subdued performance of the local sharemarket.

“We have such a huge amount money invested in superannuation as a nation and as individuals in shares.”

Of course, the fact we’re pumping so much money into superannuation highlights one the big trends affecting Australian wealth – the ageing of the population.

I asked Rogozinski whether Australia’s sluggish wealth growth might suggest that the ageing population of our rich list may have seen our wealthiest business people move out of wealth-creation mode and into wealth-preservation mode?

“In principle, you would say that’s rational behaviour for an investor. Certainly as you approach 55 or so, you start moving slowly towards the preservation or balance mode,” Rogozinski says.

“But I’m not sure if an ultra-high-net-worth individual would be actually thinking that way. I think probably not – you have to remember that most of these people are from a highly entrepreneurial background.”

He’s right, of course – entrepreneurs never lose their thirst for opportunities and ideas.

And while there is some argument to be made that many of our billionaires are focusing on succession – John Gandel’s decision to sell a 50% stake in his Northland Shopping Centre in Melbourne for a reported $455 million this week could be seen as an example of this – there is still plenty of evidence that our richest entrepreneurs have some big deals ahead.

Here are a few of the game-changers:

Gina Rinehart

Gina Rinehart’s $10 billion fortune is almost entirely on her iron ore holdings in the Pilbara region. Rio Tinto mines Rinehart’s patches of dirt and the royalties and joint venture profits roll in. But her Queensland coal assets are equally impressive and could eventually boost her fortune even further. The two coal projects she has under development in the Galilee Basin in Queensland have a reported price tag of $15 billion, although Rinehart’s Hancock Prospecting will need to sell parts of the projects to fund construction.

Clive Palmer

It’s unclear how much investor support Clive Palmer has gathered for his $7 billion float of his vehicle Resourceshouse, but it’s certainly a giant project that will have a huge impact on Queensland’s mining industry. It’s also a crucial bellwether for Australia/China relations.

Frank Lowy

Westfield has spent the last 12 months cleaning its corporate structure, including splitting its Australian assets into a separate vehicle. But as he hands the company over to sons Peter and Steven, the group is set to spend between $1.25-1.5 billion in both 2012 and 2013 on new developments and redevelopments across its global portfolio of assets.

Lindsay Fox

Lindsay Fox’s core transport operations just keep on trucking – this week it renewed its long-standing contract with Coles. But the real growth area of the group is property. Linfox plans to pump $1 billion into its property portfolio over the next four years, concentrating mainly on logistics assets. The property division is run by Lindsay’s son Andrew.

Lang Walker

Lang Walker hit the headlines this week when it was revealed he is close to selling a mall in Point Cook to help fund a $1.3 billion office and retail development in Melbourne’s Dockland precinct. For Walker, who famously sold most of his assets to Mirvac five years ago and was seemingly eying retirement, it’s a massive new project. But it’s only one of the 25 projects his company has under way.

Bob Ell

Billionaire Bob Ell is about to embark on one of the biggest projects of his career – 10,000 homes across two developments in the Tweed Heads on the NSW/Queensland border. The projects have a price tag of $6 billion and will take a whopping 15 years to build.