Women wielding US$365 billion lead boom in ‘sideways’ succession
More than a dozen women in the world’s 500 richest people have become billionaires after the death of a spouse, the highest number ever
[LONDON] Wall Street has spent years preparing for US$105 trillion to pass from elderly parents to their children, but a different kind of wealth transfer is already underway.
More than a dozen women in the world’s 500 richest people have become billionaires after the death of a spouse, the highest number ever. These so-called sideways inheritances are increasingly shaping global business as women take over huge empires, from finance to consumer goods and gambling.
Today, they oversee record fortunes totalling US$365 billion, roughly tripling since 2016, according to the Bloomberg Billionaires Index. The changes are creating huge implications for how vast sums are invested, philanthropy, and the way that wealth is passed on to the next generation.
“It’s a growing trend,” said Michelle Yue, co-founder of The Beam Network, a private financial education platform for rich women. “And yet the wealth management industry still treats spouses – especially women – as peripheral, when they are central to succession.”
Take Renata Kellnerova, who unexpectedly inherited one of the world’s biggest fortunes when her husband Petr tragically died in a helicopter crash four years ago.
The Czech native was suddenly confronted with the new reality of managing the family business while coming to terms with a huge personal loss. In the intervening years, she’s overhauled PPF Group, the conglomerate behind her husband’s fortune, making strategic changes and ultimately boosting the family’s fortune by billions of US dollars.
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‘Historic shift’
“We are seeing this historic shift where women are inheriting from their husbands,” said Emma Wheeler, head of women’s wealth at UBS Group’s global wealth-management unit. “We are seeing a whole new kind of intra-generational wealth transfer.”
The acceleration of inherited female wealth mirrors a broader rise in their ownership of assets, even as men still represent the world’s largest fortunes and hold the majority of C-suite jobs. American women are set to control assets rivalling the size of their country’s approximately US$27 trillion economy this decade as part of the unprecedented wealth transfer of the Baby Boomer generation, according to McKinsey.
And the number of self-made women on Bloomberg’s wealth index is also on the rise, tripling to nine overall, with most located in Asia. They include the largest shareholder of Russia’s biggest online retailer, Tatyana Kim, and Zhong Huijuan, the founder of Chinese drugmaker Hansoh Pharmaceutical Group.
Overall, ultra-rich women among the world’s 500 biggest fortunes, including Chinese touchscreen entrepreneur Zhou Qunfei, Mexican beer heiress Maria Asuncion Aramburuzabala and Australian mining magnate Gina Rinehart, control about US$1.3 trillion of wealth.
Rising wealth
Between year-end 2016 and early October, the growth in the wealth of widows on Bloomberg’s wealth index outpaced the overall rise in male fortunes, even as surges in megacap US stocks pushed the net worth of Elon Musk, the world’s richest person, to more than US$400 billion.
The transfer of wealth between men and women can lead to profound money-management changes. A 2023 Fidelity Investments study found female investors typically take a longer-term approach than their male counterparts during market declines. A three-year study published in 2018 from the UK’s Warwick Business School found women allocated to less speculative assets, with better results than their male counterparts. Female-led businesses are often more likely to prioritise their social impact.
Philanthropic drive
Laurene Powell Jobs, 61, has become one of the world’s most high-profile philanthropists through the Emerson Collective, an organisation founded the same year as the 2011 death of her husband, Apple co-founder Steve Jobs. Julia Flesher Koch, 63, already helped to oversee the namesake charity of her husband David before he died in 2019, and has since launched another under her own name. Christy Walton, 76, built up a global collective of organisations for initiatives, including the support of young people in rural communities, after the death of her husband John.
“I do see a growing trend of women building their financial plan around philanthropy,” said Kathleen Grace, chief executive officer and founder of Fiduciary Family Office, a Boca Raton, Florida-based wealth advisory firm. “Many of our male clients are focused on creating generational wealth first.”
Even for the most financially savvy families, the inheritance of large fortunes is still often a fraught affair, especially amidst the emotional turmoil of loss. The death of a patriarch who handled family finances can ignite tensions and sometimes court battles between surviving relatives.
The widows of commodities tycoon Robert Louis-Dreyfus and banking billionaire Joseph Safra both faced now-resolved legal fights against relatives after the death of their husbands. Gayle Benson, 78, fought a lawsuit with an estranged daughter from her husband Tom’s earlier marriage over control of his assets before he died in 2018, aged 90.
“For many widows, inheriting wealth is a dual burden of profound grief and sudden financial stewardship,” said Sin Ting So, chief client officer at Endowus, a private wealth solutions platform. “They often face a steep learning curve.” BLOOMBERG
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