Mumbai, July 1, 2008 : – Despite rising costs and financial market turmoil, high net worth individuals (HNWIs¹) and ultra-high net worth individuals (Ultra-HNWIs²) last year spent considerable amounts of their wealth on investments of passion, such as fine art, luxury automobiles, private yachts, sports teams and jewelry, according to the 12th annual World Wealth Report, issued by Merrill Lynch (NYSE: MER) and Capgemini.

The Report also found that during the past year, wealthy individuals from emerging markets demonstrated significant influence in the global luxury marketplace.

“Even as financial market turmoil impacted the United States during the second half of the year, luxury goods makers, high-end services providers, and auction houses all found ready clients in the emerging markets of the world – most notably, China, India, Russia and the Middle East – thereby sustaining their own growth,” said Bertrand Lavayssière, managing director, Global Financial Services, Capgemini.

Private jets, custom yachts, high-end automobiles and other luxury collectibles made up 16.2 percent of passion investments, making them the most popular choice among HNWIs worldwide. Fine art was the second-most popular investment at 15.9 percent, followed by jewelry at 13.8 percent. Luxury travel ranked fourth at 13.5 percent. These four categories – the most expensive of the passion investments examined in the Report – together accounted for more than half of all luxury item expenditures among HNWIs last year.

The Report found that allocations varied significantly from region to region, and between mature and emerging economies. Further differences emerged among spending on tangible passion investments, such as art collections and intangible investments, like experiential travel.

Global Preferences: Luxury Collectibles

Luxury collectibles were the most popular passion investment among the HNW population in 2007, especially among Latin Americans. While North Americans have traditionally been the largest purchasers of private jets, demand for Gulfstream jets from overseas buyers surpassed that of North Americans for the first time last year, according to U.S.-based General Dynamics.

Meanwhile, Ferrari recorded unprecedented growth in emerging markets, with sales increasing by 47.2 percent in the Asia-Pacific region and 32.3 percent in the Middle East. Two of Ferrari’s traditionally largest markets – the U.S. and Germany – recorded strong, yet single-digit, sales growth.

In recent years, the yacht market long dominated by Middle Eastern HNWIs and Ultra-HNWIs, has been led by Russian buyers. The still under construction Eclipse, believed to be the world’s largest private yacht, is reportedly owned by a Russian oil billionaire.

Global Preferences: Fine Art

Demand for fine art was strong in both mature and emerging markets. As in the past, Europeans and Latin Americans invested more in fine art than counterparts in other regions, allocating 22 percent and 21 percent to art collections, respectively. In Asia Pacific, HNWIs spent 13 percent of their passion investments on fine art.

Newly minted millionaires from Moscow to Mumbai, many of whom made fortunes in the global commodities boom, were active at art auctions last year. Christie’s International and Sotheby’s both profited from the expanding Russian economy, with their combined Russian sales totaling $324.9 million, a 45-percent bump from their $223.6 million total in 2006.

Global Preferences: Jewelry, Gems and Watches

Jewelry, gems and watches were the top passion investment by HNWIs and Ultra-HNWIs in the Middle East and Asia last year, although the category ranked third on a global basis.

Global Preferences: Luxury/Experiential Travel

With luxury goods increasingly within the reach of upper-middle class individuals, especially in more mature markets, HNWIs and Ultra-HNWIs continued to differentiate themselves last year with “exclusive experiences.” As a result, they spent a considerable amount on such indulgences, including impromptu trips to Italy to race a Ferrari, or a three-week trip across the world, including stops along the way in Africa’s Serengeti and Peru’s Machu Picchu – to ensure that they continued to “live the dream.” Philanthropic travel is also on the rise, with more HNWIs seeking out opportunities to engage in charitable work, while still enjoying luxurious accommodations. Tour operators arrange for wealthy clients to visit schools, health clinics and poor neighborhoods to see firsthand how financial donations might be implemented. Over the past two years, demand for such trips has grown 15 percent among HNWIs, according to luxury tour operator Artisans of Leisure.

Looking Ahead

Industry analysts state that the global art market and luxury industry tend to be latecomers to economic downturns, which may explain why they did not experience the impact of the financial market turmoil of 2007. However, history has shown that investments in fine art, private planes, luxury cars and other high-end collectibles tend to fare well during economic downturns. In fact, analysts suggest that new wealth and growing consumer demand in Asia, Eastern Europe, and the Middle East will continue to outweigh the pressures of the economic slump in Western markets.

About Merrill Lynch

Merrill Lynch is one of the world's leading wealth management, capital markets and advisory companies, with offices in 40 countries and territories and total client assets of approximately $1.6 trillion. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies, with more than $1 trillion in assets under management. For more information on Merrill Lynch, please visit www.ml.com.

About Capgemini

Capgemini, one of the world's foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working - the Collaborative Business Experience – and through a global delivery model called Rightshore®, which aims to offer the right resources in the right location at competitive cost. Present in 36 countries, Capgemini reported 2007 global revenues of EUR 8.7 billion (approximately US$12 billion) and employs over 83,000 people worldwide.

Capgemini provides deep industry experience, enhanced service offerings and next generation global delivery to serve the financial services industry. With a network of 15,000 professionals serving over 900 clients worldwide, we move businesses forward with leading services and best practices in Banking, Insurance, Capital Markets and Investments. For more information, please visit www.capgemini.com/financialservices.

Note to Editors/Reporters: To download the 2008 World Wealth Report, please visit www.capgemini.com/worldwealthreport.

• HNWIs¹ - Individuals with net assets of at least US$1 million, excluding their primary residence and consumables.
• Ultra-HNWIs² - Individuals with net assets of at least US$30 million, excluding their primary residence and consumables.