If last week’s rise in interest rates is making you worry about your finances, spare a thought for the poor super-rich.
It seems that despite sitting on wealth that most people can only dream about, some are in fact finding day to day life a bit of a struggle.
The reason, according to financial analyst Datamonitor, is that ‘ultra high net worth’ individuals – worth an average pounds 8.8 million each – have so much wealth tied up in property that they struggle to free up enough cash to maintain a lavish lifestyle.
It means that financial services companies are having to dream up innovative ways of freeing up assets to allow the very rich to enjoy their fortunes while protecting their underlying wealth.
Many have been badly burned by the roller coaster stock market of recent years and have channelled their money into capital-protected investments or hedge funds.
And Datamonitor says the market for such high end financial services is booming.
The number of ultra high net worth individuals in the UK will grow by 60 per cent to nearly 7,000 between now and 2007, Datamonitor estimates.
The combined wealth of these ‘sophisticated and demanding’ people is expected to grow by 65 per cent to pounds 61.7 billion in the same period.
‘These investors are often in need of capital in order to live on a day-to-day basis or for further investment,’ said Alan Shields of Datamonitor. ‘In response to this need, wealth managers are developing products that offer clients who have considerable wealth but are poor in liquid assets the opportunity to borrow money against existing, mainly non-financial assets. These are very innovative and respond to a pressing need.’
