According to a Merrill Lynch report on the wealthiest people in Israel, the list of millionaires and billionaires in Israel continued to grow in 2006.
The Wertheimer family, with liquid assets of $4.25b, topped the list of Israeli billionaires. Shari Arison, with liquid assets also slightly exceeding $4b, appears in the second place, followed by Lev Leviev with $3.25b and Yitzhak Tshuva and Sami Ofer, with $2.25b each. At the lower end of the list, with $1.25b, are Benny Steinmetz, Morris Kahn, Kobi and Yehuda Richter and Arcadi Gaydamak. Gaydamak is the only person added to the list of Israeli billionaires, and no one dropped off. The list is based on cash assets in his or her bank account, and does not include real estate, companies or mortgaged property.
According to the Merrill Lynch report, the number of multimillionaires in Israel rose by 15 percent in 2006 from 84 to 87. A multimillionaire is defined as a person whose liquid assets exceed $30m. The number of multimillionaires worldwide increased by 11.3 percent.
The number of millionaires in Israel rose by 12.9 percent, from 7,000 to 7,200. The rate of increase in the number of millionaires in Israel is 50 higher than global rates. Liquid assets of the Israeli rich grew in 2006 by 17 percent, to $35b, compared to $30b in 2005.
Ori Goldfarb, VP of Private Banking at Merrill Lynch Israel, estimated Wednesday that the reasons for the increase in the number of millionaires in Israel include rechanneling of investments into developing markets, the continued rise of global and Israeli stock markets, the intensive activity of foreigners in Israel, and continuing brisk business in merges, acquisitions and capital raising in Israel and worldwide.
Goldfarb added that because of rising stock markets and unprecedented yields recorded in emerging markets, and in particular in Brazil, Russia, India and China (the BRIC countries), the Israeli wealthy have adopted an aggressive investment policy in these countries, in high risk, high yield products, such as real estate, commodities and capital markets.
Data from the report points to a rising global inflation index for so-called "high-end" luxury items such as watches, hotels, schools, wines, yachts and planes. Between 2005 and 2006, the luxury index rose by 7 percent, while the general price index increased by 4 percent.
The rising luxury index reflects an increased willingness of multimillionaires to acquire high-end products with their increasing capital. Thus, 11 $150m private executive planes were purchased in 2006, compared to the $20-$30m price of private planes.
Shari Arison is apparently the only Israeli who owns a private plane of the more expensive sort. The size of yachts likewise differentiates between multimillionaires and the rest. Luxury yachts sell for $30m-$50m apiece. Arison and Yossi Maiman appear to be the only Israelis to own such vessels.
Less arms, more artAdditional investment channels preferred by the world's rich are known as "passion investments," and include sport teams, as well as collections of various types, such as art, wine, jewelry, diamonds and clocks. Such purchases are generally defined by the rich as collections, whose value is expected to increase upon their bequeathal, and are not acquired for everyday use. Goldfarb says that 2-4 percent of the capital in the hands of the world's wealthy is invested in such collections, and about 10 percent in "passion investments."
A new and growing trend is abstention from investment in "negative" companies, such as arms and cigarette manufacturers or polluting industries, and a focus instead on activities that contribute to the state of the world. Arison is an example of an Israeli who actively pursues ways to improve the world. There are currently 160 portfolio managers worldwide who handle a total capital of $5 trillion that is invested in responsible industry.
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