Global wealth hits $40.7 trillion but growth slows

By Laurence Fletcher

LONDON (Reuters) - Assets held by the world's richest people grew at a slower pace in 2007 than 2006 as the credit crisis began to bite, a study showed on Tuesday, despite rapid growth in emerging markets.

However, growth over the coming five years is forecast to be higher than last year's predictions, as U.S. economic growth eventually picks up and emerging markets continue to beat analysts' forecasts.

The Merrill Lynch and Capgemini Annual World Wealth Report showed global assets held by wealthy investors rose by 9.4 percent to $40.7 trillion (20.6 trillion pounds) in 2007, below 2006's 11.4 percent growth, with the second half of the year seeing a slowdown in Western economies.

Wealth is defined in the report as investable assets of more than $1 million held by one individual.

"Clearly the credit crisis and financial markets had an impact, mostly in the latter half of the year," said Nick Tucker, executive director of Merrill Lynch's global private client group.

"2007 is best described as a year of two halves, with divergence between the mature and emerging economies."

Soaring oil and commodity prices helped lift growth in assets of wealthy individuals in Latin America, which saw a 20.4 percent rise in assets, the Middle East with 17.5 percent growth and Africa with a 14.9 percent increase.

This came as growth in assets slowed in Europe and North America, both of which were hit hard by the subprime crisis, which began mid-way through the year, and associated writedowns and volatile markets.