The world’s wealthiest people are ended 2016 with $237 billion more than they had at the start, an indication that they may not have lost anything after all.
Triggered by disappointing economic data from China at the beginning, the U.K.’s vote to leave the European Union in the middle and the election of billionaire Donald Trump at the end, the biggest fortunes on the planet whipsawed through $4.8 trillion of daily net worth gains and losses during the year, rising 5.7 percent to $4.4 trillion by the close of trading Dec. 27, according to the Bloomberg Billionaires Index.
Simon Smiles, chief investment officer for ultra-high-net-worth clients at UBS Wealth Management said “In general, clients rode through the volatility,” stressing that “2016 ended up being a spectacular year for risk assets. Pretty remarkable given the start of the year.”
The gains were led by Warren Buffett, who added $11.8 billion during the year as his investment firm Berkshire Hathaway Inc. saw its airline and banking holdings soar after Trump’s surprise victory on Nov. 8. Buffett, who’s pledged to give away most of his fortune to charity, donated Berkshire Hathaway stock valued at $2.6 billion in July.
The U.S. investor reclaimed his spot as the world’s second-richest person two days after Trump’s victory ignited a year-end rally that pushed Buffett’s wealth up 19 percent for the year to $74.1 billion.
“2016’s been event-driven with global news driving prices rather than fundamentals,” said Michael Cole, president of Ascent Private Capital Management, which has about $10 billion of assets under administration.
“The belief that Trump is going to come in and deregulate big parts of the economy is driving the markets right now.”
The individual gains for the year were dominated by Americans, who had four of the five biggest increases on the index, including Microsoft Corp. co-founder Bill Gates, the world’s richest person with $91.5 billion, and oilman Harold Hamm.
The country’s richest were largely opposed to a Trump presidency during the election, including Dallas Mavericks owner Mark Cuban, who told the media in May that stocks could fall as much as 20 percent if Trump were to win the election.
U.S. billionaires — including Buffett — favoured Trump’s rival Hillary Clinton. Still, they profited from his victory when they added $77 billion to their fortunes in the post-election rally fuelled by expectations that regulations would ease and American industry would benefit.
The New York real estate mogul is building a cabinet heavy on wealth and corporate connections, and light on government experience, a mix that hedge fund billionaire Ray Dalio said last week would unleash the “animal spirits” of capitalism and drive markets even higher.
Dalio is the world’s 63rd-richest person with $14.1 billion.
Investors and executives welcomed Trump’s picks, including billionaire Wilbur Ross to lead the Department of Commerce and former Goldman Sachs Group Inc. executive Steven Mnuchin as his Treasury secretary, who have a combined net worth of at least $5.6 billion, according to the index.
“You know, I was not opposing Trump as much as most people,” Saudi Arabian billionaire Mohamed Bin Issa Al Jaber said in a Dec. 11 interview. “He’s capable and — as a businessman — he’s shrewd about the bottom line. The people he’s surrounding himself with have baggage but they’re also successful and shrewd.”
France’s Bernard Arnault was the sole non-American representative among the five best performers, adding $7.1 billion to take his fortune to $38.9 billion. His LVMH Moet Hennessy Louis Vuitton SE said the Chinese luxury-goods market is improving.
Gates remained the world’s richest person throughout the year. Amancio Ortega, Europe’s richest person and founder of the Zara clothing chain, was in second place on the index for most of the year until he ceded it to Buffett in November. Ortega, who dropped $1.7 billion in 2016, is the world’s third-richest person with $71.2 billion.
Nigeria’s Aliko Dangote, the richest person in Africa, lost $4.9 billion or one-third of his wealth as the combined effect of falling oil prices and the June devaluation of the naira pushed him to No. 112 with $10.4 billion. Dangote was the world’s 46th-richest person in June.
Saudi Arabia’s Prince Alwaleed Bin Talal Al Saud fell $4.9 billion, a 20 percent drop. Alwaleed said in November that all of his stakes in public companies including Citigroup Inc. are potentially for sale, reversing a longstanding policy that some of his most prized shareholdings were “forever.”
