June 28, 2007	Thursday	Jamadi-us-Sani 12, 1428

ZURICH: Assets held by the world’s richest people rose by 11.4 per cent last year, a study showed, but a slowing world economy might put a brake on the lavish expansion rate in coming years.

Soaring commodity prices and equity markets and rapidly expanding emerging economies caused the global pool of wealth — assets of more than $1 million held by one individual — to expand to $37.2 trillion at the end of 2006.

“Many economies are likely to decelerate ... The dual risks of rising energy prices and geopolitical conflicts are a continued threat, adding a level of uncertainty to our current forecasts,” the Merrill Lynch/Cap Gemini study said.

Global wealth was expected to expand by 6.8 per cent each year up until 2011, boosting the world’s total wealth to $51.6 trillion, said the study, known as the World Wealth Report, and widely used as a benchmark in the industry.

Low market volatility in 2006 had taken away some of the lustre of alternative investments such as hedge funds and private equity, the study also showed, with exposure halving to 10 per cent from 20 per cent in an average portfolio.

Booming real estate markets attracted more money however, helped by good returns in Real Estate Investment Trusts (REIT), and the average allocation in wealth portfolios rose to 24 per cent from 16 per cent in 2005.

At 23 per cent, wealth grew fastest in Latin America, followed by Africa by 14 per cent, the Middle East by 12 per cent and Asia-Pacific by 11 per cent.

The overall growth rate of wealth was well above global economic growth of 5.4 per cent in 2006, the study said.

North America also had a healthy growth rate of 10 per cent, and remained the region with the largest population of wealthy investors in the world, with 3.2 million people ranking as millionaires or billionaires.— Reuters