By Professor Roger KING
Senior Advisor and Founding Director, Roger King Center for Asian Family Business and Family Office
HKUST Business School

To preserve its wealth, a family needs entrepreneurial energy, so the family ofce should ensure that some resources are devoted to forward-thinking members.

In 2017, when the Hong Kong-based Tung family sold its 69% share of Orient Overseas (International) to Cosco Shipping and Shanghai International Port (Group) for HK$34 billion (US$4.3 billion), it seemed to be the end of a family business story that stretched back to the founder, Tung Chao-yung in 1969, and included a former chief executive of Hong Kong, Tung Chee-hwa1. Three generations of the Tung family helped build OOIL into the seventh largest container shipping company in the world, with 3.2% of the global market. But from an Asian family business perspective, this was a natural progression. The stereotypical Asian family business is said to last no more than three generations. But for the Tung family, like many others, the exit from the original family business represents both a liberation and a challenge. The liberation appeals to the third and fourth generations who may now pursue interests of their own, outside the family mantle. The challenge is how to preserve the values of the family and preserve the wealth. This is where the family office comes in.

Hong Kong and Singapore are currently engaged in a tug of war over family offices, entreating Asia’s ultra-high net worth individuals (UHNW, generally considered individuals with holdings over US$30 billion) to their shores. At the latest count, Singapore has 700 family offices,2 up from 400 at the end of 2020, while Hong Kong has 400, with 14 set up in the past year and another 50 in the pipeline, according to the South China Morning Post.3 Although the competition for family offices is largely one about wealth management, these family offices can represent the continuing legacy of a family well beyond the founders. Whether they do so is perhaps the greatest challenge faced by Asian family businesses once they have exited the original business, like the Tungs and many others.

Establish a governance framework

UBS, the investment bank, polled 230 of its global clients with an average net worth of US$2.2 billion, between January and March 2023.4 It found that only 42% of the family offices surveyed had a wealth succession plan or governance framework. Even among the larger family offices, with assets over US$1 billion, only 43% had a wealth succession plan and 66% a governance framework. Only 21% provided family education, development and mentoring sessions organized by the family office.5

While family offices have significant regional differences in their style of investing and approach to generational change, the Asian family business model contributes to a unique importance for the family office beyond simply managing investments. The family office is obviously a western construct, but it can provide the stickiness or glue that keeps the family together and supports wealth preservation over the long term. First-generation wealth creators in Asia, with their deep background of Confucian values and attitudes, value not only the preservation of wealth but also the preservation of legacy and family harmony and unity.

These three “Ps” may not be so different from the values of other societies, but particularly in the Sinosphere – China, Hong Kong, Singapore, and to some extent Japan, Vietnam and Korea – the family office is often engaged in charitable work and respect for family tradition. One Hong Kong family, now in its third and fourth generation, uses their family office to organize social gatherings around special events in the Chinese calendar such as grave sweeping. Hong Kong recently acknowledged the importance of philanthropy to family offices by allowing charitable entities to have up to 25% equity in the investments of the family office.6 This makes it possible for the family to have the equivalent of an endowment for a specific charitable entity, such as a foundation that will implement family philanthropy over time.

Asian family businesses have a particular experience because of the incredible speed of economic growth, particularly in China. While Hong Kong experienced a boom in the 1960s and 1970s, when many of the well-known Hong Kong tycoons got their start, the equivalent in China is the boom of the 1990s and beyond. The business cycle has been extraordinarily short, with families experiencing the same kind of transition between the founder generation and their heirs as is normal in Hong Kong and elsewhere in the Sinosphere between the third and fourth generations. A recent survey by Shanghai Jiaotong University showed that 80% of the “rich second generation” were unwilling to take over running the family business, partly because they have advanced degrees and occupy a special status within their companies. Their circle of friends is outside the family business, and they are little interested in the details of operating a business, according to Professor Yu Mingyang. Instead, they want to jump straight into financial business, using their assets to invest in funds or private equity.

Utilize professional managers

Professor Yu believes a crisis is at hand with the mainland’s “second generation” entrepreneurs, since a professional management system has yet to take effect, and the influence of the founder can be overwhelming. He argues that the government should support a smooth transition of the enterprise succession, and not just leave the issue to chance. “Only professionalization, the proposition of professional managers, can make the succession of the second generation a matter of course,” he says.

The family office can be a resource for the specific transition faced by mainland family businesses, but it is also true that more broadly, the business cycle is increasing in speed while human lifespans grow ever longer. This implies a growth span for Asian family businesses which is more like the mainland experience, given the enormous drive on the part of the founder. While the second generation may have a different experience in other parts of the Sinosphere, and remain more committed to the business, the longevity of each generation puts even more pressure on the family office to come up with solutions beyond the original business that held the family together.

So what kind of solutions might the family office, or the multi-family office, provide, looking ahead through the generations? Some family members, of course, might not see much benefit in remaining attached, whether to commemorate parents or grandparents or to allow family control of their assets. One possibility is to use the family office as a council to oversee funding of projects by family members. Instead of simply looking for the best yield in material terms, at least part of the family assets might be spent on promising members of the younger generation. In other words, the family office could provide seed capital to entrepreneurial younger family members.

This would require a matrix or other structure to evaluate projects, but unlike the quantitative analysis typically applied to investments, the family council would consider other values. These could be summarized as commitment, confidence, knowledge and passion (or CCKP). An individual within the family should display these characteristics in order to be deemed worthy of seed funding. The basic logic is that in order to preserve wealth, the family needs entrepreneurial energy. In order to preserve legacy, it should devote some part of its resources to promising family members. To preserve harmony and unity, this should be an effort that involves family members, not just professional managers.

Mitigate potential conflict

The family office can also be a platform for family governance, whether or not the founder’s business remains intact. The Chinese have a saying about the “curse” of three generations of family wealth, based on long experience with a patrimonial system that engenders conflict as the family grows larger. Each set of siblings has their own emotional dynamic, but ideally the family office can mitigate any potential for conflict by helping to assign roles, including running the existing business.

Philanthropy is another avenue to extend legacy and family harmony and unity, if not wealth preservation. However, stating the obvious, there will be no philanthropy if there is no wealth. In Hong Kong as well as other parts of the Sinosphere, including mainland China, millennials are excited by impact investing, a form of philanthropy in which the philanthropist can remain deeply involved in project operation and the output is social capital. Millennials are also much more likely to be convinced that ESG investment – in the environment, society and governance – supports yields in a macro-economic sense even if in general they represent enterprise costs. But if philanthropy brings the family together around good causes, it has the secondary effect of keeping the family together when economic forces might tend to bring about conflict.

Foresight, commitment, and purpose

There can be no doubt that family offices in Asia are shaped by the businesses created by the founders as well as their values. How well these values are reflected in the organization and goals of the family office will depend on foresight, commitment, and a sense of purpose, not just the fundamental purpose of the office as a wealth management vehicle. In Singapore, the Wealth Management Institute offers courses for family office professionals, including certificates in legacy and impact for the family, succession and wealth transfer, and principles of investing for the family. Hong Kong is planning something similar.7

Our ongoing effort at HKUST is complementary to these developments. At the Roger King Center for Asian Family Business and Family Office,8 we provide the intellectual foundation to bridge the knowledge gap between academics, practitioners and policy makers, through workshops and seminars on a wide range of topics, as well as our Asia family business case studies. As the landscape for family businesses changes in the China-influenced parts of Asia-Pacific, so will the needs and purposes of family offices in the region. We hope that our work will support the development of both in this enormously vibrant and productive region, which over the past decades has increasingly become a hub and driver of the global economy.


  1. Dominique Nguy, “Tung family sells shipping firm for $34b,” The Standard, 10 July 2017, https://www. Tung-family-sells-shipping-firm-for-$34b, accessed 19 July 2023
  2. Tong See Kit, “More ultra-wealthy families setting up offices in Singapore, and they’re not just coming from Asia,” Channel News Asia, 12 January 2023, https:// ultra-rich-set-singapore-financial-sector-3182131, accessed 19 July 2023
  3. SCMP Editorial, “Hong Kong ideally placed to be family office hub,” South China Morning Post, 23 November 2022, opinion/article/3200628/hong-kong-ideally-placed-be- family-office-hub, accessed 19 July 2023
  4. Mia Castagnone and Iris Ouyang, “Asia-Pacific family offices continue ‘strategic shift’, to increase equities and developed-marketfixed-income asset allocations: UBS,” South China Morning Post, 1 June 2023, https://www. asia-pacific-family-offices-continue-strategic-shift- increase-equities-and-developed-market-fixed, accessed 19 July 2023
  5. UBS Switzerland AG, Global Family Office Report 2023 (Zurich, Switzerland), content/dam/assets/wm/static/noindex/gfo/docs/ubs- gfo-report-2023.pdf, accessed 19 July 2023
  6. Vivien Teu, Partner, Hong, Kong, Dentons, “Hong Kong tax concessions to welcome family offices set- up,” 23 May 2023, en/insights/articles/2023/may/23/hong-kong-tax- concessions-to-welcome-family-offices-set-up, accessed 19 July 2023
  7. “Family Office,” Wealth Management Institute, Singapore, office/, accessed 19 July 2023
  8., accessed 19 July 2023