LTX Focus: Private Wealth Management | Issue XV | August 2008

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Dear Colleague,

In this month's LTX focus we take a fresh look at Private Wealth Management.

There is such a lot of money!

Despite a presumably temporary dip in asset values as a result of shell-shocked markets post sub-prime, said recently that total hedge fund assets stood at USD2.848tn at the end of March 2008.

New allocations of USD53.02bn during Q1 couldn't overcome performance losses of USD93.18bn, resulting in total hedge fund assets experiencing a quarterly decrease for the first time on record. The 1.4% decrease in Q1 2008 compares to an increase of 11.5% in the first quarter of 2007.

According to the 12th annual World Wealth Report, released in June 2008 by Merrill Lynch and Capgemini, the wealth of the world's high-net-worth individuals (HNWIs1) increased 9.4 percent to US $40.7 trillion in 2007. The number of HNWIs in the world increased 6 percent in 2007 to 10.1 million, the number of ultra-high-net-worth individuals (Ultra-HNWIs2) increased by 8.8 percent, and for the first time in the history of the Report, the average assets held by HNWIs exceeded US $4 million.

A study by consulting firm McKinsey and Company published in January, 2007, estimated that the value of total global financial assets, including equities, government and corporate debt securities, and bank deposits, expanded to $140 trillion in the 12 months to the end of 2005, an increase of $7 trillion from a year earlier. That is a growth rate of 5.3%.

There are no consolidated figures for the growth in offshore assets - many jurisdictions simply don't release figures. But for those that do, it is clear that the rate of increase in banking, trust and fund assets dramatically outpaces McKinsey's global figure.

In Jersey, for instance, banking and investment fund assets were approaching GBP500 billion at mid-year, up 40% in the last two years. In Guernsey, bank deposits rose 14% last year to GBP92 billion, and fund assets rose 45% to GBP210 billion in the year to June, 2008.

In the Isle of Man, fund assets surpassed the $50 billion mark as at June 30, 2007, bringing the total of assets just in the UK's near-shore islands to more than US$2 trillion, up 30% in total over the previous two years.

So where does it all come from?

From rich people, stupid!

They are the new kids on the block, the new rulers of our world. They are going to get richer, and there are going to be more of them. There are already more than 10 million dollar millionaires in the world, and that number has seen more than 10% annual growth in the last few years.

It is estimated that the assets of these 10 million rich people top US$50 trillion. And beneath them are tens of millions of 'mass affluent' people with free, investible assets in excess of US$100,000. And beneath them . . .

You can read the rest of the feature here:


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Kind regards,

Kate James

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News Headlines from
Australia Announces Major Tax System Review
by Mary Swire,, Hong Kong Thursday, August 07, 2008
The government of Prime Minster Kevin Rudd has welcomed Wednesday's launch of the Australia’s Future Tax System (AFTS) Discussion Paper by Treasury Secretary Dr Ken Henry - claimed to be the most comprehensive review of the country's tax system in fifty years. [ FULL STORY ]
BVI Government Welcomes IMF Decision On Offshore Financial Centres
by Amanda Banks,, London Thursday, August 07, 2008
The BVI Government has welcomed the recent International Monetary Fund (IMF) decision to halt its discrimination between onshore and offshore financial centres. [ FULL STORY ]
Guernsey Funds Under Management Continue To Grow
by Jason Gorringe,, London Thursday, August 07, 2008
Funds under management and administration in Guernsey grew by GBP3.4bn (1.7%) over the quarter ended June 2008 to reach a total of GBP207.2bn, the Guernsey Financial Services Commission has announced. [ FULL STORY ]
Medvedev Urges Russian Authorities To Stop 'Terrifying' Business
by Tatiana Smolenskaya,, Moscow Wednesday, August 06, 2008
Russian President Dmitry Medvedev has urged state institutions to stop 'terrifying' private business with unwarranted inspections and unnecessary bureaucracy in what is being seen by some observers as a sign of a split between the President and Prime Minister Vladimir Putin. [ FULL STORY ]
Irish Stock Exchange Establishes Supervisory Authority
by Jason Gorringe,, London Wednesday, August 06, 2008
Deirdre Somers, Chief Executive of the Irish Stock Exchange (ISE) has announced that, following an organisational review, the ISE is to establish a new supervisory entity, and has appointed a senior figure from the UK Financial Services Authority (FSA), Mike Duignan, to lead the change. [ FULL STORY ]
Suspension Of Stamp Duty Land Tax Could Result In Treasury Shortfall Of Up To GBP7bn
by Robin Pilgrim,, London Wednesday, August 06, 2008
Leading business and financial adviser Grant Thornton has stated this week that reports of plans by the Treasury to suspend stamp duty land tax (SDLT) for all home buyers could help kick-start the ailing property market, but would result in the Treasury having to fund a tax short fall of up to GBP7bn from other sources. [ FULL STORY ]