London Daily

Focus on the big picture.
Saturday, May 31, 2025

Companies run by billionaires are better for investors

Companies run by billionaires are better for investors

Billionaires tend to be good at making money for themselves. Buying into the companies they control could make the rest of us richer, too.

Shares in companies controlled by billionaires have significantly outperformed the global market average over the past 15 years, according to a new report from Swiss bank UBS (UBS) and auditing firm PwC.

To arrive at that conclusion, researchers analyzed the stock performance of 603 public companies in which billionaires have considerable sway and to which most of their wealth is tied.

The companies' annualized gain over the 15-year period was nearly 18% versus 9% for a broad stock index that tracks shares in 47 countries. The billionaire-controlled companies were also more profitable.

"The outperformance we call the 'billionaire effect' depends on the entrepreneur keeping control, irrespective of whether the business is public or private," the report said.


What makes billionaires special

The report found that billionaires tend to share three traits that make their companies successful: smart risk taking, business focus and determination.

Billionaire entrepreneurs have an "optimistic attitude," focusing on risks they understand and reducing them. They also constantly hunt for opportunities and are "undeterred by failures and roadblocks," it said.

"Billionaires' enterprises tend to pursue a long-term strategy that benefits from an exceptional alignment between performance and management incentives," the report added.

It found that close to 27 million jobs could be directly or indirectly linked to billionaire-controlled enterprises.


Billionaire wealth dips in 2018

Following years of growth, the "billionaire boom" experienced a "natural correction" in 2018 on a stronger dollar, market volatility and economic weakness, said Josef Stadler, an executive at UBS Global Wealth Management.

The number of billionaires fell by 57, with especially sharp declines in China and India. Only the Americas bucked the trend, lifted by the fortunes of US tech entrepreneurs. There were 89 US tech billionaires at the end of 2018, up from 70 in 2017.

Billionaires ended 2018 nearly 35% wealthier than five years earlier, owning a combined $8.5 trillion in assets. The number of women billionaires increased 46% over the same time period to reach 233, but that's only 11% of the total.


Tech is king


The net wealth of tech entrepreneurs has almost doubled over five years to $1.3 trillion, with the number of billionaire-controlled tech companies rising from 76 to 148.


Ten of the world's top 20 tech billionaires are from the United States and four are from China, including ByteDance founder Zhang Yiming.


Industrial entrepreneurs saw their wealth decline 15% to less than $609 billion against a backdrop of declining commodity prices.


Billionaires looking to grow their wealth are increasingly favoring direct private investments over listed equity markets, said Simon Smiles, an executive at UBS Global Wealth Management.


Billionaires and taxes


UBS cautioned that there could be negative consequences if billionaires are forced to pay higher taxes, a strategy that leading politicians in countries including the United Kingdom and the United States have suggested as a remedy for rising income inequality.


Democratic presidential candidate Elizabeth Warren wants to impose a wealth tax of 6 cents on every dollar of net worth above $1 billion and raise capital gains taxes. Jeremy Corbyn, the leader of Britain's opposition Labour Party, has said that "in a fair society there would be no billionaires."


Stadler warned against punitive taxes on billionaires, particularly those who are entrepreneurs. "Millions of jobs have been created by people who take outlandish risks. If you cap the upside, billionaires will manage their risk appetite downwards, [and] the impact will be detrimental to society," he told CNN Business.


The UBS banker acknowledged that wealth has become concentrated in fewer hands, but he said that concerns about inequality need to be balanced against what billionaires have achieved.

Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Trump Threatens 25% Tariff on iPhones Amid Dispute with Apple CEO
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
Liverpool Car Ramming Incident Leaves Multiple Injured
Australia Faces Immigration Debate Following Labor Party Victory
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
Macron Dismisses Viral Video of Wife's Gesture as Playful Banter
Cleveland Clinic Study Questions Effectiveness of Recent Flu Vaccine
Netanyahu Accuses Starmer of Siding with Hamas
Junior Doctors Threaten Strike Over 4% Pay Offer
Labour MPs Urge Chancellor to Tax Wealthy Over Cutting Welfare
Publication of UK Child Poverty Strategy Delayed Until Autumn
France Detains UK Fishing Vessel Amid Post-Brexit Tensions
Calls Grow to Resume Syrian Asylum Claims in UK
Nigel Farage Pledges to Reinstate Winter Fuel Payments
Boris and Carrie Johnson Welcome Daughter Poppy
×