Ever wonder how many billionaires are produced inside the world's top business schools? Seven of the ten top billionaire-producing business schools are in the United States.
By a wide margin, Harvard University tops the list. Harvard has produced 335 Rhodes scholars and 150 Nobel laureates. Nonetheless, few know about Harvard Business School's stellar reputation, as the world's top producer of billionaires.
According to the annual Wealth-X and UBS Billionaire Census of 2014, as charted below by Statista, Harvard Business School (U.S.) has created 64 billionaires, far outpacing the second runner-up, Stanford University (U.S.), producing 23 billionaires from its Graduate School of Business. Following at a highly respectable distanced third is Columbia Business School (U.S.) with 14 billionaire alumni.
Rounding out the top 10 list of the world's business schools counting billionaires among their alumni are:
#4 University of Pennsylvania Wharton School of Business (U.S.) at 12;
#5 University of Chicago Booth School of Business (U.S.) at 10;
#6 INSEAD (France) at 9;
#7 New York University Stern School of Business (U.S.) at 7;
#8 International Institute for Management Development (Switzerland) at 5;
#9 University of Southern California Marshall School of Business (U.S.) at 5;
#10 London Business School (U.K.) at 4.
"Pursuing higher education is not a prerequisite for attaining billionaire status: 35% of the world’s billionaires do not have a bachelor’s degree and some even dropped out of high school," the Wealth-X report reveals.
Most of these remaining 35% of the world's billionaires, nonetheless, just attended high school, albeit perhaps, some pretty fine elite private high schools, which a good friend of mine who did, recently told me is all one really needs for a good life, when such a "great books" liberal education is obtained early on in one's life at the tender ages of 7-18 — The Wonder Years!
Notwithstanding, "of the 65% who have been awarded a bachelor’s degree, many go on to pursue further studies. For example, 21% of “educated” billionaires have a Masters in Business Administration, and 11% of “educated” billionaires hold a Ph.D.," the Wealth-X study reports.
Among these top 20 colleges and universities listed below (compiled by Wealth-X, including 16 inside the United States), having undergraduate alumni, who have gone on in life to become billionaires, only 16% of the world’s billionaires attended these schools; 84% did not, electing instead to attend among 700 alternative higher education institutions.
#1 University of Pennsylvania (U.S.) at 25 (billionaire undergraduate alumni)
#2 Harvard University (U.S.) at 22
#3 Yale University (U.S.) at 20
#4 University of Southern California (U.S.) at 16
#5 Princeton University (U.S.) at 14
#6 Cornell University (U.S.) at 14
#7 Stanford University (U.S.) at 14
#8 University of California Berkeley (U.S.) at 12
#9 University of Mumbai (India) at 12
#10 London School of Economics and Political Science (U.K.) at 11
#11 Lomonosov Moscow State University (Russia) at 11
#12 University of Texas (U.S.) at 10
#13 Dartmouth College (U.S.) at 10
#14 University of Michigan (U.S.) at 10
#15 New York University (U.S.) at 9
#16 Duke University (U.S.) at 9
#17 Columbia University (U.S.) at 8
#18 Brown University (U.S.) at 8
#19 Massachusetts Institute of Technology (U.S.) at 7
#20 ETH Zurich (Switzerland) at 6
How wealthy are these billionaire business clubbers in 2014?
The typical billionaire has nearly half of his or her wealth in ownership of privately-held businesses.
The typical billionaire owns four properties worth some US$94 million collectively.
There are a record 2,325 billionaires in the world today in 2014, up 7.1 percent from last year.
Four of five of these billionaires are men, of which 60% are "self-made" wealth owners (at US$3.2 billion in mean net worth), 26.9% collectively inherited and self-made their wealth (at US$2.9 billion in mean net worth), and 13.1% purely inherited their wealth status (at US$3.2 billion in mean net worth).
Men make up 2,039 of billionaires worldwide. They own 82.7 percent or US$6.4 trillion of the combined wealth of all billionaires, which increased by 12 percent in 2014 to US$7.3 trillion. Or better still, this amounts to about 4 percent of global wealth.
One in five billionaires are women, of which 65.4% are "self-made" wealth owners (at US$2.2 billion in mean net worth), 17.5% collectively inherited and self-made their wealth (at US$3.4 billion in mean net worth) and 17.1% purely inherited their wealth status (at US$3.5 billion in mean net worth).
Women make up just 289 of billionaires globally. These few remarkable women own just 12.8 percent or US$930 billion of the total wealth of all billionaires.
Just as astonishing, altogether, these billionaire's total wealth at US$7.3 trillion is far more than the combined market capitalization of all listed firms on the Dow Jones Industrial Average, Slate reports.
Where do these billionaires reside around the world?
New York is home to the world's most billionaires at 103 — far ahead of Moscow with 85 billionaire residents and Hong Kong with 82 billionaires calling The People's Republic of China their homestead. Europe still has the largest number of billionaires, making the European Union (which includes several asset protectionsafe havens, including Lichtenstein, Austria, Luxembourg, Switzerland, and The Netherlands, to name just a few) as their permanent domicile, which one can see in the map from Statista below.
Eight of the 20 countries with the most billionaires are in Asia, says the 2014 Wealth-X and UBS Billionaire Census findings.
The Wealth-X record-breaking number of billionaires worldwide in 2014 (2013 shown in parenthesis) are as follows: North America is 609 (552); Latin America is 153 (111); Europe is 775 (766); Africa is 40 (42); Middle East is 154 (157); Asia is 560 (508); and finally The Southeast Asia Pacific is 34 (34).
How do these billionaire business school alumni maintain their capital reserves?
Wealth-X data reveals 46.9% of billionaires’ wealth is concentrated in their ownership of privately-held businesses — these are companies whose stock is not publicly traded. This amounts to 47%, or US$3.4 trillion, of the wealth of billionaires being privately-held, one and a half times more than the US$2.1 trillion, or 29%, of billionaire wealth being publicly-held.
This leaves 5.1 percent of the remaining wealth (about US$160 million in net worth) of these billionaires invested in real estate and luxury items (including art), and 19.1% (or about $600 million), as cash-on-hand ready for furtherance of investments and philanthropy (including charitable giving back to the colleges and universities that made 65% of these super wealth owners), according to Wealth-X.
As a result, billionaires tend to have huge capital reserves, which creates high-cash yield investments through structured financial instruments, such as interest-rate swaps, credit default swaps or foreign exchange rate derivatives, according to Simon Smiles, Chief Investment Officer of UBS Wealth Management.
In his discussions with billionaire clients across the world, Smiles says three questions are on the minds of billionaires and the trustees of their wealth trusts, "They want to know what they should do with their cash balances in a zero rate world of — apparently, after many false starts — rising inflation; what investment themes they should focus on over the longer term; and how they can generate investment returns less correlated to movements in global equity markets."
Smiles says inside the 2014 Wealth-X report, billionaires are constantly on the lookout for exotic investment strategies that not only protect, but also, substantially grow their wealth. Such wealth-creation means, especially attractive to billionaires, known as “alpha” strategies, involve investments that create cash out of risk advantages by selling derivatives and "exotic" financial instruments to structure low risk, higher cash yields, and greater returns on investments.
Billionaires are also interested in stakeholder management issues across global communities, involving what is termed as "secular" investments, involving rising standards of living, urbanization, and population growth, and their impact on heightened protein consumption, not only in developed countries, but especially in under-developed countries and emerging economies across Asia, writes Smiles.
"As a result, the investment opportunities offered by this long-term secular investment trend are varied: public equities, private equity, and direct investments, such as agricultural land and fisheries," Smiles typically advises his global high-net billionaire clients.