Running a Hong Kong family office is a delicate balancing act, insiders say
Hong Kong family offices will need to strike a balance between emotional management, trust and professionalisation to succeed, family office heads said.
"Emotion stays away from the boardroom. That's critical," said Mahesh Harilela, a member of his family's council, speaking at the Post's Redefining Hong Kong family office conference on Friday. "Boardroom meetings are there to strategise to ensure that we can actually manage crisis."
His family owns diversified conglomerate the Harilela Group.
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The Harilelas have six family units spanning three generations - and they are growing. The Harilela Group has interests in a number of industries, including hospitality, real estate and trading.
As the family has grown over the years, the council has been integral in establishing the Harilela legacy as well as its policies and philosophies, Harilela said.
To ensure the family office can continue to thrive, egos must be put aside, he said.
"When the emotion comes in, the disruption in one meeting actually causes a cascade all the way through, and five years later, you still haven't implemented a strategy," said Harilela.
Governance and rules are important, Harilela said, but "rules have to be dynamic" to reflect the needs of the younger generations.
For Hampton Tao, investment manager of a smaller, two-generation New Heritage Investment family office, the aim is to stick together - even when investments do not go well.
"We have developed a mutual trust through shared experiences, we make investment decisions using consensus, and of course, occasionally - hopefully not all the time - we suffer the consequences of our mistakes together," said Tao.
Tao said the family's philosophy is simple: be professional, adopt the best institutional practices and focus on investor education.
The number of single-family offices in Asia-Pacific is expected to surge by 40 per cent to 3,200 by 2030, outpacing all regions globally, according to a recent report from Deloitte. The report also underscored the need for sophisticated global wealth management infrastructure in Asia for the growing number of younger family offices.
Hong Kong is home to more than 2,700 single-family offices, with more than half of them founded by individuals whose wealth exceeds US$50 million.
"We need our unity in order to preserve our wealth," said Jennifer Su Tan, the executive vice-president at Luen Thai Group, a Hong Kong-based family office. "From there, it branches out. Someone's in charge of our investments. Someone will go run our businesses."
A key to keeping the Luan Thai unit together is maintaining strong foundations in education and health - values that have been part of the family since the first generation.
"Health, education, unity ... that was the guiding principle," said Tan.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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