Adrian Jenkinson of Wealth-X explains the trends within the ultra high net worth (UHNW) segment in Indonesia, and looks at what this means for opportunities in the local market going forward.

Date: May 2012

Tags: Indonesia, UHNW, Emerging markets

• Wealth-X’s recent “Indonesia Wealth By Tier” report identified at least 775 UHNW individuals in the country, including at least 50 billionaires
• There is now a mix of inherited wealth and newly-created wealth, which will create some challenges for the private banking industry in terms of understanding more about how to service these clients
• Indonesia’s recent upgrade to investment-grade status has created is growing interest in understanding more about the ultra-wealthy in the country

In Wealth-X’s recent “Indonesia Wealth By Tier” report, Adrian Jenkinson said in an interview that the firm identified at least 775 UHNW individuals in the country, including at least 50 billionaires.

This shows a significant amount of growth in the ultra-wealthy space in Indonesia, he explained, with 50-plus individuals joining the UHNW segment in the last six to seven months.

A lot of this growth has been driven by the traditional commodity sectors – in terms of coal and tin – as well as by the traditional industries such as palm oil, textiles and tobacco, said Jenkinson.

Interestingly, he added, there is also now a mix of inherited wealth and newly-created wealth, which he expects to create some challenges for the private banking industry in terms of understanding more about how to service these clients, as well as how to build a strategy that meets their needs.

An emerging focus on Indonesia

According to Jenkinson, Indonesia continues to be seen as a growth hotspot for wealth in Asia.

After its recent upgrade to investment-grade status, for example, there is growing interest in understanding more about the ultra-wealthy in the country.

There is also more appetite for detailed information on what is happening in the wealth space within emerging markets generally, said Jenkinson, with Indonesia seen as one of the more important of these markets in Asia Pacific.

Information of value

Jenkinson said that as part of the detailed research the firm does on UHNW individuals – meaning anyone with a net worth of more than US$30 million – Wealth-X looks not only at their mix of wealth, but also at: their passions, interests and hobbies; their known associates; their advisers; and their philanthropic profile.

In Indonesia, for example, he said in addition to continued growth in the ultra-wealthy space, there is more and more interest from local UHNW individuals in investing offshore, specifically in properties.

Such information is important to understand, said Jenkinson, given the lack of data about UHNW individuals in emerging markets. This is particularly relevant not only for the private banking community in Indonesia, but also across the region.

Developing detailed insights about clients in Indonesia will support the local and offshore banks in building a better strategy to be successful with their clients, he explained.