The base of the wealth pyramid is occupied by people from all countries of the world at various stages of their life-cycles; in contrast, HNW [high net worth, defined as people with an investable income of between $1 million and $50 million] and UHNW [ultra high net worth, defined as people with an investable income of at least $50 million] individuals are heavily concentrated in particular regions and countries, sharing a much more similar lifestyle. Even members at other locations tend to participate in the same global markets for high coupon consumption items. The wealth portfolios of individuals are also likely to be similar, dominated by financial assets and, in particular, equity holdings in public companies traded in international markets.
The UHNWIs themselves describe the same experience. As Glenn Hutchins, cofounder of the private equity firm Silver Lake, puts it, “A person in Africa who runs a big African bank and went to Harvard Business School has more in common with me than he does with his neighbors, and I have more in common with him than I do with my neighbors.” The circles he moves in, Hutchins explains, are defined by “interests” rather than “geography”: “Beijing can look a lot like New York. You see the same people, you eat in the same restaurants, you stay in the same hotels. We are much less place-based than we used to be.”
Aditya Mittal, the CFO of ArcelorMittal and son of its billionaire founder, is one of the foreign-born plutocrats who have taken over the
“I think, in a sad sense, these cities are so similar now because of globalization,” Mittal told me over coffee in Manhattan. “I mean the difference in identity is not as significant as it used to be. For a global businessman, you can achieve almost the same set of objectives whether you’re in London, New York, or a place like Singapore. You have access to talent, you have access to bankers, lawyers, you have access to good restaurants, good hotels. I mean, the main components of running a business can be found in any big city. So you can live in any of these cities and it’s not such a big change anymore to move from, say, London to New York. Of course, that’s a good thing in many ways, but I hope they don’t lose their individual identity too much.”
“There are more and more global CEO meetings in the emerging markets, especially China,” Dominic Barton, managing director of McKinsey, told me over breakfast in midtown Manhattan. Barton, a Canadian who lives in London but whose secretary is based in Singapore, was due to see Steve Schwarzman, the private equity investor, later that day. “The last time I saw Steve was in China,” where Blackstone had held a partners meeting the previous fall, Barton recalled. Barton himself was traveling to Chile later in the week, and then on to Sao Paolo, where McKinsey was holding a board meeting. Schwarzman, meanwhile, was about to move his primary residence to Paris for six months (he already owned one home in that country, in the south of France, of course), the better to oversee what he believed would be significant investment opportunities in Europe and Asia.
Schwarzman spends about half his time traveling. Blackstone, which he cofounded, has offices around the world in cities including Shanghai, Mumbai, London, Paris, and Dusseldorf, and the firm both invests in and raises money outside the United States.
“There is an emergent power in people whose shared experiences are more to each other than to their local context and their local governments. I think that’s basically true,” Schmidt told me. “The people you’re describing see themselves as global citizens first. That’s a relatively new phenomenon. So, while they’re certainly patriotic about their countries and patriotic about where they grew up, and they love their mothers and so forth—but they see themselves as global citizens. And so, when something happens in the globe that’s bad, it bothers them.”
“This is the new wave, the new trend,” Wang Huiyao, founder and president of Beijing’s Center for China and Globalization, told me. “We had the globalization of trade, we had the globalization of capital, and now we have the globalization of talent.
“It is no longer about brain drain, or even brain gain,” Dr. Wang said. “It is about global brain circulation.”
Dr. Wang recalled that three decades ago, when he first came to North America as a student, there was only one flight a day to China. Today, he said, “there are two or three dozen, if not more.”
As a result, instead of immigration being a single journey with a fixed starting point and end point, Dr. Wang said many Chinese have become what he calls “seagulls,” going back and forth between San Francisco or Vancouver and Beijing or Shanghai. He is a seagull himself: I spoke over the phone to Dr. Wang while he was in Washington, D.C.; he is spending the academic year at Harvard’s Kennedy School in Cambridge, Massachusetts; his institute is in Beijing; and he still owns an apartment in Vancouver, where he once lived.
In a similar vein, the wife of one of America’s most successful fund managers offered me the small but telling anecdote that her husband is better able to navigate the streets of Davos than those of his native Manhattan. When he’s at home, she explained, he is ferried around town by a car and driver; the snowy Swiss hamlet, which is too small and awkward for limos, is the only place where he actually walks. One international media executive, who traveled 120 nights out of the past 365 days, described the group this way: “We are the people who know airline flight attendants better than we know our own wives.” An investment banker born and educated in Scandinavia, who built his career working as an investment banker with multinational firms in London and New York and who today works for an emerging markets plutocrat, told me that his family’s recent move from London to Hong Kong was easier than moving from one borough of New York to another.
The globalization of the super-elite starts before the deals do—in school. The plutocracy doesn’t have its own passport, but it does have its alma maters—America’s Ivy League, plus Stanford and Oxbridge, and the world’s top business schools, mostly an American group, but also including Europe’s INSEAD. This is a world, as Turow puts it, where the province of your MBA matters more than your nationality. You can find quite a few plutocrats who were educated entirely in their home countries—this is, remember, largely a self-made group—but it is rare to come across one whose children don’t attend one of these top global universities. Many start earlier, sending their children to boarding schools, especially the fancy English ones, where Russian oligarchs landing their helicopters on the sports fields for parent visiting day has become commonplace. China’s plutocrats, who devote more than a fifth of their annual spending to their children’s education, are enthusiastic globalizers. According to Rupert Hoogewerf, publisher of the Hurun Report and the premier chronicler of the culture of the Chinese super-elite, “Four out of every five Chinese entrepreneurs today are considering sending their children to school overseas.” Middle Kingdom billionaires prefer to send their children abroad for high school, where British public schools are the preferred destination. For college, when the children of Chinese millionaires join the plutonomy, too, the most elite universities are America’s Ivy League. As a European multimillionaire explained to an eastern European billionaire, over a meal I shared with them at Davos, the advantage of the British public school their children both attended (thanks to the help of the same international education placement adviser) was that, “in addition to learning the language, they will make the right international friends.”
The global takeover of these elite international institutions is beginning to be reflected in the name above the door—Oxford is today home to both the Blavatnik School of Government, a would-be rival to Harvard’s Kennedy School, endowed with a ?75 million gift from Russian-born metals and oil baron Len Blavatnik (a truly global plutocrat who was born in Odessa, earned an MBA from Harvard, and has homes in New York and London), and the Said Business School, founded with a ?20 million gift from Wafic Said, who was born in Syria, made his fortune in Saudi Arabia, and maintains his primary homes in Paris as well as tax-friendly Monaco.
CITIZENS OF THE WORLD
Like any country, the plutonomy is not uniform: its tribes have distinct national customs and its individual members make their own choices about how to live. The plutocrats whose native countries are repressive or volatile, like the Russians or the Middle Easterners, tend to be the most thoroughly global. Some, like the Chinese or the Indians, cultivate powerful community networks even when they live and work outside their home country. Some countries have built their national economy in large part by providing a physical haven for the globe-trotting members of the plutocracy—this has been the business of Switzerland and Monaco for generations. More recently, Singapore and Hong Kong have gotten into the act. Dubai is a newly minted, air-conditioned contender. English is the lingua franca of the super-elite, which means that, along with its elegant buildings and favorable tax treatment of foreigners, Britain, too, is a popular spot: nearly 60 percent of the properties in London worth more than ?2.5 million are owned by foreigners.
