Billionaires flee in cash

Billionaires are fleeing into cash due to increased economic and political risks, according to the new Billionaire Census  The research shows that the super-rich hold a record $1.7 trillion in cash, money parked  on the sidelines in long-term and short-term government bonds. According to the research firm, which collected data from nearly 2,500 billionaires, that is the highest amount since these measurements began in 2010.

Wealthy people want to have less exposure to the stock market because of all the economic and political uncertainties. The prospect of the U.S. elections and important elections in Europe brings political uncertainty, leading billionaires to prefer cash. It is also possible that they do not find the stock market attractively valued at the moment and therefore want to keep a little more money on hand. "As soon as equity valuations return to more attractive levels, we expect the money to be reinvested," Wealth-X writes in its report.

The flight to 'safe' government bonds is accompanied by a fall in interest rates. Three-quarters of government bonds are already yielding less than one per cent and global interest rates are at historic lows.  Buy gold Increasingly interesting as an alternative safe haven, because the precious metal has no counterparty risk.

Billionaires park assets on the sidelines

Billionaires see wealth grow

Billionaires saw their wealth increase by 5.4% to $7.7 trillion in the past year. That percentage is twice as large as the growth of the global economy, suggesting that wealth inequality increased further last year. Europe has the largest number of super-rich with 806, but most of the growth is in Asia, as expected. There, the number of billionaires rose by 15% last year to 645. In North America, the number of super-rich grew by about three percent to 628.

It is striking that the number of super-rich people employed by banks and financial institutions is decreasing, while the number who have become rich through a multinational or a technology company has risen sharply. Despite this, the financial sector still represents the largest number of billionaires.

Where is the big money? (Source: Billionaire Census)

Pyramid of the super-rich (Source: Billionaire Census)

Super-rich by region (Source: Billionaire Census)