Over the next 20 to 30 years, more than 1,000 billionaires are expected to pass over $5 trillion to their children. UBS’s most recent survey of billionaires, Billionaire Ambitions Report 2023: Changing of the guard, found that this generational transition is already underway – and it is bringing new ideas about business, investment and philanthropy.
For the first time, UBS found that new billionaires had acquired more money through inheritance than through entrepreneurship. And these heirs may have different ideas than their parents did about what to do with their wealth.
In examining the goals and attitudes of the new billionaires, the UBS survey found that most billionaires in the second generation or later want to continue their family’s legacy:
- A majority of both first-generation (65%) and second-generation or later (60%) billionaires say one of their main objectives is to enable future generations of their family to benefit from their wealth.
- Among billionaires in the second generation or later, 68% say they want to continue and grow the family’s achievements.
But there are also some generational differences in attitudes toward both investing and philanthropy:
- First-generation wealth creators were likely to focus on debt and fixed income investments, whereas successor generations favored riskier investments such as private equity.
- Billionaires in the second generation or later appear less focused on philanthropic goals: More than two-thirds of first-generation billionaires said making an impact on the world was a main objective, but only 32% of successor generations did. This may be partly because people may be reluctant to give away money they did not earn.
- The survey did find a “trend towards impact investing or managing businesses in ways that address environmental and social issues for both commercial and altruistic ends,” the report says.