Russia has one of the 10 fastest-growing populations of wealthy individuals, and they're increasingly investing their newly accrued cash in art, jets and the occasional football team, according to a report released Tuesday.

The number of Russians with a net worth of more than $1 million excluding primary residences, classified in the report as "high net worth individuals," rose 14.4 percent in 2007 to 136,000 people, Merrill Lynch and Capgemini said in their 2008 World Wealth Report.

"Passion investments," such as luxury collectibles, art, sports teams and flashy private transportation, are very popular among HNWIs, as well as their peers with $30 million or more, referred to in the report as Ultra-HNWIs.

"Russia is probably the biggest market for private jets in Europe," Jean-Marie Deluermoz, Merrill Lynch's director of emerging European markets, said after a presentation of the report.

"And look at the yachts, and the luxury cars and the antique cars and art. Clearly Russians are building their investments in passion investments."

William MacDougall, director of MacDougall Auctions, said by telephone that sales of Russian art as part of an informal "Russia Week" in London earlier this month brought in ?12.4 million ($24.4 million) for his firm.

"Russian art is being bought by anyone who has money. If you want to invest in the Russian economy you'd do much better to invest in Russian paintings," MacDougall said.

Deluermoz, of Merrill Lynch, said the country was "significantly outpacing the rest of Europe on the back of high commodity prices."

The number of Russian HNWIs will continue to grow, despite rising inflation, a "critical lack of modern infrastructure, environmental degradation and a declining population," the report says, noting that GDP growth, strong domestic demand, foreign direct investment, high savings rates and high market capitalization were outweighing the obstacles.

The pace of HNWI population growth puts Russia with Brazil, India and China, known as the BRIC countries, as a leader among the emerging markets.

Overall, "as mature economies slowed, the BRIC nations turned in particularly strong performances. They posted in aggregate the greatest gains in HNWI populations, 19.4 percent, and accumulated wealth, 25.1 percent, driven both by impressive economic gains and robust market capitalization growth," the report says.

The first six months of the year fed off momentum from 2006, the report says, while the second half suffered from a host of problems, including the global credit crunch and soaring oil prices.

Inflation, running well over government targets in Russia, is taking a toll on the world's ultra-wealthy, too, the report said. The report said a basket of luxury goods — Forbes' Cost of Living Extremely Well Index — rose 6.2 percent in 2007, more than doubling the global inflation rate.

"My feeling is that inflation for the luxury sector is higher than in the rest of the market in Russia," said Maxim Kashulinsky, the editor of Forbes Russia.

"But people don't care. They will just continue to spend cash. This will be driven by the growth of income and the lack of competition in the luxury market," he said.