Russia – The Future of HNWIs to 2016: The Land of Oil and Gas

Synopsis
This report is the result of WealthInsight’s extensive research covering the HNWI population and wealth management industry in Russia. It provides market sizing and forecasts of local HNWI and UHNWI populations. The report also leverages WealthInsight’s HNWI Database, to provide key demographic breakdowns such as sector and city specific data.

Summary
As of 2011, there are just over 159,500 HNWIs in Russia. This report provides robust projections of the volume, wealth and asset allocation of local HNWIs and UHNWIs. The report then couches these findings in an analysis of the local Wealth Management and Private Banking sector, and the opportunities therein.

Scope
The report features:
• Independent market sizing of Russian HNWIs across five wealth bands
• HNWI volume, wealth and allocation trends from 2007 to 2011
• HNWI volume, wealth and allocation forecasts to 2016
• HNWI and UHNWI asset allocations across 13 asset classes
• Number of UHNWIs in each city
• City wise breakdowns of UHNWI volumes and volume growth from 2007 to 2011, as well as 2016 forecasts
• Number of wealth managers in each city
• City wise ratings of wealth management saturation and potential
• Details of the development, challenges and opportunities of the Wealth Management and Private Banking sector in Russia
• Size of the local wealth management industry
• Largest private banks in Russia by AuM
• Detailed wealth management and family office information
• Insights into the drivers of HNWI wealth

Reasons To Buy
• The WealthInsight Intelligence Center Database is an unparalleled resource and the leading resource of its kind. Compiled and curated by a team of expert research specialists, the Database comprises up to one hundred data-points on over 100,000 HNWIs from around the world. It also includes profiles on major private banks, wealth managers and family offices in each country. With the Database as the foundation for our research and analysis, we are able obtain an unsurpassed level of granularity, insight and authority on the HNWI and wealth management universe in each of the countries and regions we cover.
• Comprehensive forecasts to 2016.
• Detailed information on UHNWIs in each major city.

Key Highlights
• As of 2011, there are just over 159,500 HNWIs in Russia, with a combined wealth of US$941 billion.
• The total number of HNWIs in Russia decreased by 18.1% during the review period (2007–2011), while HNWI wealth declined by 25%.
• WealthInsight research shows that over 35% of Russian HNWI wealth was held offshore at the end of 2011.
• The current wealth management leaders in Russia are UBS and Credit Suisse with local AuM of US$15 billion and US$10 billion respectively. Other prominent foreign players include Pictet and Goldman Sachs.
• The leading locally based private banks are UFG Invest, Troika Dialog and Third Rome.
• Moscow is home to the largest portion of Russia’s UHNWIs (64% or 821 UHNWIs). There are also sizable Russian UHNWI populations in St Petersburg (99 UHNWIs), Yekaterinburg (38 UHNWIs), Novosibirsk (31 UHNWIs), Kazan (29 UHNWIs) and Kemerovo (27 UHNWIs).
• St. Petersburg and Yekaterinburg were the top performing major cities for UHNWIs over the review period, with UHNWI volume growth of 19% and 20% respectively.

Table of Contents
1 Introduction
1.1 What is this Report About?
1.2 Definitions
2 Executive Summary
3 Wealth Sector Fundamentals
3.1 Political Background to the Wealth Sector
3.2 Economic Background
3.3 Benchmarking Russian Wealth in Context
3.3.1 Distribution of wealth
3.3.2 HNWI volume and wealth trends
4 Findings from the WealthInsight HNWI Database
4.1 Trends in HNWI Wealth to 2016
4.1.1 HNWI trend analysis
4.1.2 Trends of the wealth bands
4.1.3 Demographic breakdown of HNWI
4.2 UHNWIs
4.2.1 UHNWI volume trend analysis
4.2.2 UHNWI wealth trend analysis
4.2.3 Per capita UHNWI trend analysis
4.2.4 Demographic breakdown of UHNWIs
4.2.5 UHNWIs – job titles
4.2.6 UHNWIs – industry breakdown
4.2.7 UHNWIs – industry performance
4.2.8 UHNWI breakdown by city
4.2.9 UHNWIs – city performance
4.2.10 UHNWIs – population densities
4.2.11 UHNWIs – city forecasts
4.2.12 UHNWIs – Industry breakdown by city
4.3 UHNWIs –Billionaires
4.3.1 Billionaire Volume Trend Analysis
4.3.2 Billionaire wealth trend analysis
4.3.3 Billionaire per capita net worth trend analysis
4.3.4 Billionaires by industry
4.3.5 Billionaires by city
4.3.6 List of billionaires
4.4 UHNWIs –Centimillionaires
4.4.1 Centimillionaire volume trend analysis
4.4.2 Centimillionaire wealth trend analysis
4.4.3 Centimillionaire per capita net worth trend analysis
4.5 UHNWIs –Affluent Millionaires
4.5.1 Affluent millionaire volume trend analysis
4.5.2 Affluent millionaire wealth trend analysis
4.5.3 Affluent millionaire per capita net worth trend analysis
4.6 Core HNWIs
4.6.1 Core HNWI volume trend analysis
4.6.2 Core HNWI wealth trend analysis
4.7 Core HNWIs –Mid-Tier Millionaires
4.7.1 Mid-tier millionaire volume trend analysis
4.7.2 Mid-tier millionaire wealth trend analysis
4.7.3 Mid-tier millionaire per capita net worth trend analysis
4.8 Core HNWIs – Lower-Tier Millionaires
4.8.1 Lower-tier millionaire volume trend analysis
4.8.2 Lower-tier millionaire wealth trend analysis
4.8.3 Lower-tier millionaire per capita net worth trend analysis
5 Analysis of Russian HNWI investments
5.1 Analysis by Asset Classes
5.1.1 Changing trends in liquid assets (equity, fixed income and cash and deposits)
5.1.2 Trends in alternative assets
5.1.3 Trends in “art, wine and wheels”
5.1.4 Trends of investments in real estate
5.1.5 Trends of Investments in Cash and Deposits
5.1.6 Trends of investments in fixed income
5.1.7 Trends of investments in equity
5.1.8 Trends of investments in business interest
5.2 Analysis of Foreign Investments
5.2.1 Trend of investments in the rest of Europe
5.2.2 Trend of investments in North America
5.2.3 Trend of investments in Asia-Pacific
5.2.4 Trend of investments in the Middle East
5.2.5 Trend of investments in Latin America and Africa
5.3 Analysis of Russian UHNWI investments
6 The Wealth Sector in Russia
6.1 Competitive Landscape
6.1.1 Private banks
6.1.2 Wealth managers
6.1.3 Family offices
6.1.4 Wealth management in each city
6.2 Clientele Model
6.3 Behavioral Mapping of Wealth Management Industry in Russia
6.4 Porter’s Five Force Analysis – Wealth Management Industry in Russia
6.5 Other Financial Services Review
6.5.1 Retail banks
7 Appendix
7.1 Philanthropy
7.2 Regulatory Environment in Russia
7.2.1 Banking regulations
7.2.2 Regulations on taxes
7.2.3 Regulations on wealth management and private banking
7.2.4 Regulations related to foreign investment
7.3 Largest companies in Russia
7.4 Hi-Tech Hubs in Russia
7.5 Key Economic Trends and Drivers
7.5.1 LC to US$ exchange rate
7.5.2 Real GDP growth
7.5.3 Per capita GDP
7.5.4 Domestic market capitalization
7.5.5 Housing price index
7.5.6 Commodity index
7.5.7 FDI
7.5.8 Investments of FIIs in equity products
7.5.9 Inflation rate
7.5.10 Interest rate
7.5.11 Balance of payments
7.5.12 Government debt
7.5.13 Stock market performance
7.6 Wealth breakdowns
8 About WealthInsight

List of Tables
Table 1: HNWI Wealth Band and Group Definitions
Table 2: Russia: HNWIs – Volume Distribution Wealth Pyramid, 2011
Table 3: Russia: HNWIs – Wealth Distribution Wealth Pyramid (% share), 2011
Table 4: Russia: UHNWIs – Top Cities, 2011
Table 5: Russia: UHNWIs – Smaller Cities, 2011
Table 6: Russia: UHNWI Population Density in Major Cities, 2011
Table 7: Russia: UHNWI Growth Rates for Top Cities, 2007–2016
Table 8: Russia: Key Sectors for UHNWIs in Major Cities, 2011
Table 9: Russia: Billionaires – Market Overview (US$ Billions) 2007–2016
Table 10: Russia: Billionaires – Industry Breakdown, 2011
Table 11: Russia: Billionaires – City Breakdown, 2011
Table 12: Russia: Billionaire List (US$ Billions) 2011
Table 13: Russia: Centimillionaires – Market Overview, 2007–2016
Table 14: Russia: Affluent Millionaires – Market Overview, 2007–2016
Table 15: Russia: Mid-Tier Millionaires – Market Overview, 2007–2016
Table 16: Russia: Lower-Tier Millionaires – Market Overview, 2007–2016
Table 17: Russia: HNWIs – Holdings Growth (%), 2007–2016
Table 18: Russia: HNWIs – Liquid Asset Composition (%), 2007–2016
Table 19: Russia: HNWIs – Trends of Investments in Alternative Assets (%), 2007–2016
Table 20: Russia: HNWIs – Alternative Asset Composition (%), 2007–2016
Table 21: Russia: Trends in “Art, Wine and Wheels”, 2007–2011
Table 22: Russia: City-Wise Real Estate Performance, 2007–2011
Table 23: Russia: Prime Residential Indices by City
Table 24: Russia: Commercial Property Indices by City
Table 25: Russia: Prime International Cities, 2007–2011
Table 26: Russia: HNWIs – Real Estate investment in London, 2007–2016
Table 27: Russia: HNWIs – % Foreign Allocation, 2007–2016
Table 28: Russia: UHNWIs – Allocations and Share of HNWI Assets, 2011
Table 29: Russia: The Largest Private Banks (US$ Billions) 2011
Table 30: Russia: Other Private Banks, 2011
Table 31: Russia: Local Wealth Managers, 2011
Table 32: Russia: Multi-Family Offices, 2011
Table 33: Russia: Wealth Management Companies Per City, 2011
Table 34: Russia: Largest Retail Banks, 2011
Table 35: Russia: Cites with the most Retail Banks Branches, 2011
Table 36: Russia: LC to USD Exchange Rate, 2006–16
Table 37: Russia: Real GDP Growth, 2006–16
Table 38: Russia: GDP Per Capita, 2006–16
Table 39: Russia: Domestic Market Capitalization (US$ Billions) 2006–11
Table 40: Russia: Housing Price Index, 2006–11
Table 41: Russia: Commodity Indices, 2006–16
Table 42: Russia: FDI (US$ Billions) 2006–2016
Table 43: Russia: Investments of FIIs in Equity Products (US$ Billion) 2006–10
Table 44: Russia: Inflation Rate, 2006–16
Table 45: Russia: Money Market Rate, 2006–16
Table 46: Russia: Balance of Payments (US$ Billions) 2006-11
Table 47: Russia: Government Debt to GDP, 2006–16
Table 48: Russia: Stock Market Performance, 2006–11
Table 49: Russia: HNWI Wealth Vs GDP Ratio, 2007–16
Table 50: Appendix One
Table 51: Appendix Two

List of Figures
Figure 1: HNWI Wealth Band Definitions
Figure 2: Russia: Map
Figure 3: Russia: Asset Price Performance, 2007-11
Figure 4: Russia: HNWI Performance (US$ Billion), 2007-16
Figure 5: Russia: Russian HNWIs Vs the World
Figure 6: Russia: HNWIs – Growth Factor Correlation, 2007–2011
Figure 7: Russia: HNWIs – Volume Distribution Wealth Pyramid, 2011
Figure 8: Russia: HNWIs – Wealth Distribution Wealth Pyramid (% share), 2011
Figure 9: Russia: HNWIs – Age Distribution, 2011
Figure 10: Russia: UHNWIs – Wealth Share Vs Volume Growth, 2007–2011
Figure 11: Russia: UHNWIs – Volume by Wealth Band, 2007–2016
Figure 12: Russia: UHNWIs – Wealth by Wealth Band (US$ Billion), 2007–2016
Figure 13: Russia: UHNWIs – Age Distribution (% Share), 2011
Figure 14: Russia: UHNWIs – Job Titles, 2007–2011
Figure 15: Russia: UHNWIs – Distribution by Industry, 2011
Figure 16: Russia: UHNWIs – Sector Performance, 2007–2011
Figure 17: Russia: UHNWIs – City Performance, 2007–2011
Figure 18: Russia: UHNWIs – City Numbers, 2007–2011
Figure 19: Russia: UHNWIs – Regional Forecasts, 2011–2016
Figure 20: Russia: UHNWIs – City numbers, 2011–2016
Figure 21: Russia: Billionaires – Market Overview, 2007–2016
Figure 22: Russia: Centimillionaires – Market Overview, 2007–2016
Figure 23: Russia: Affluent Millionaires – Market Overview, 2007–2016
Figure 24: Russia: Mid-Tier Millionaires – Market Overview, 2007–2016
Figure 25: Russia: Lower-Tier Millionaires – Market Overview, 2007–2016
Figure 24: Russia: HNWIs – Asset Class Composition, 2007–2016
Figure 25: Russia: HNWIs – Trends in Total Liquid Assets (as a % of Total Assets), 2007–2016
Figure 26: Russia: HNWIs – Liquid Assets Composition (US$ Billion), 2007-16
Figure 27: Russia: HNWIs – Trends in Alternative Assets (in US$ Billion), 2007–2016
Figure 28: Russia: Trends in “Art, Wine and Wheels”, 2007–2011
Figure 29: Russia: HNWIs – Foreign Investment Allocation and Growth (%), 2011–2016
Figure 30: Russia: HNWIs – Global Distribution of Foreign Investments, 2007–2016
Figure 31: Russia: UHNWIs – Asset Class Composition, 2007–2016
Figure 32: Russia: Wealth Management Industry – Maturity Level Of Players
Figure 33: Russia: Wealth Management Industry – Behavioral Mapping, 2011
Figure 34: Russia: Wealth Management Industry – Five Forces Analysis
Figure 35: Russia: LC to USD Exchange Rate, 2006–16
Figure 36: Russia: Real GDP Growth (%), 2006–16
Figure 37: Russia: GDP Per Capita, 2006–16
Figure 38: Russia: Domestic Market Capitalization (US$ Billion) 2006–11
Figure 39: Russia: Housing Price Index, 2006–11
Figure 40: Russia: Commodity Indices, 2006–16
Figure 41: Russia: FDI (US$ Billion) 2006–2016
Figure 42: Russia: Investments of FIIs in Equity Products (US$ Billion) 2006–10
Figure 43: Russia: Inflation Rate, 2006–16
Figure 44: Russia: Money Market Rate, 2006-16
Figure 45: Russia: Balance of Payments (US$ Billion) 2006-11
Figure 46: Russia: Government Debt to GDP, 2006–16
Figure 47: Russia: Stock Market Performance, 2006–11
Figure 48: Russia: HNWI Wealth Vs GDP Ratio, 2007–16
Figure 51: Russia: HNWIs – Volume by Wealth Band, 2007–2016
Figure 52: Russia: HNWIs – Wealth by Wealth Band (in US$ Billion), 2007–2016
Figure 52: Russia: HNWIs – Wealth per Capita (in US$ Billion), 2007–2016