Among the industry's wave of wealthy investors is a burgeoning population of young entrepreneurs with new ideas about investing, and China proves a promising location for this group.

China has the largest percentage of entrepreneurs posting higher profits last year, at 68.8 per cent, while the country also places higher than average importance on corporate social responsibility, according to the 2016 BNP Paribas Global Entrepreneur Report.

A new generation of entrepreneurs under the age of 35 years is emerging with different ambitions, business success rates and leadership styles than their older counterparts - a trend that will no doubt interest the wealth management sector - according to the report. Based on a survey by Scorpio Partnership, the report analyses the behaviour of around 2,600 wealthy entrepreneurs across 18 countries in Asia, North America and Europe, with aggregate wealth of over $17 billion.

It describes Generation Y entrepreneurs (born between 1980 and 1995) as “millennipreneurs” - a breed of entrepreneurs that tend to create more companies, with larger headcounts and target profits. While they are very much interested in the “new economy”, they are equally active in many traditional sectors, including retail and professional services such as law and accounting.

The US, China and Germany were voted by respondents as the best locations for setting up a business. Meanwhile, Germany is a highly attractive country for first-generation entrepreneurs, according to the report, with 63.4 per cent of founders being the first in their family to start a business. Entrepreneurs are also highly active in Belgium, with each entrepreneur starting on average 6.7 businesses compared to the global average of 5.7 companies per entrepreneur, it added.

The majority (78 per cent) of millennials surveyed come from families with a history of running their own businesses and, as a group, each has already established on average 7.7 companies, compared with an average of 3.5 among those over the age of 50 and baby boomers. With that said, the business sectors in which they are prospering are not that different from the previous generation. The top three wealth creation sectors cited were retail (12.5 per cent), professional services (8.5 per cent) and technology (7.3 per cent). The top three “industries of the future” were ranked as financial services (9.3 per cent), social media (8.6 per cent) and e-commerce (6.3 per cent).

Female focus

The report also focused on female entrepreneurs, and said these individuals tend to be more ambitious and have been more successful than their male counterparts. “They also take a different approach to entrepreneurship in terms of leadership, financing and objectives,” said BNP Paribas Wealth Management's co-chief executive, Sofia Merlo. Three-quarters of female “millennipreneurs” are expecting business profits to increase in the next 12 months and also expect close to a 35 per cent gross profit margin for 2015.

The top three wealth creation sectors identified by this subset were retail (16.5 per cent), professional services (11.2 per cent) and fashion (6 per cent). If they were to switch business, they would go for e-commerce (9.3 per cent), travel, hospitality and leisure (8.6 per cent) and social media (6.3 per cent). They also said the top three criteria for success are making a profit on their initial investment (35.2 per cent), passing the business down to the next generation (12.3 per cent) and having a positive social impact (11.2 per cent).

Poland, Spain and China have the highest rates of activity by successful female entrepreneurs, while Swiss, German and Belgian female entrepreneurs are the most likely to be first-generation entrepreneurs with no history of business ownership in their family. This perhaps indicates, therefore, a stronger need for advice in their endeavors, the report said. The preferred sources of finance used by females starting a business – reported as personal savings (43 per cent), bank loans (21 per cent) and personal loans from friends or family (17 per cent) – reveal that women are more likely to rely on self-financing rather than a bank loan for their starting capital, it added.