By Professor Winnie PENG
Director of the Roger King Center for Asian Family Business and Family Office HKUST Business School

Asian family offices can shape the future via impact creation, says Professor Winnie Peng, Director of the Roger King Center for Asian Family Business and Family Office.

The development of Asian wealth

Asia is regarded as the world’s leading economic growth engine. The region’s gross domestic product (GDP) in 2021 was 6% higher than that prior to the COVID-19 pandemic. In the five years up to 2021, Asia’s economy in terms of GDP expanded by 21%, as indicated by the China Family Office Report 2022.1 According to the Forbes Billionaires List for 2021, Greater China – including mainland China, Hong Kong, Macao and Taiwan – had a grand total of 744 billionaires, while there were 724 in the United States and 617 in Europe. The average age of Asian billionaires is just 59; Chinese tycoons are the youngest, at 55 on average.

Hong Kong has the highest density of wealthy people in the world. With 9,679 ‘very high net worth’ individuals per million adults, Hong Kong leads all other countries by a significant margin, according to Wealth-X in 2020.2 Hong Kong is also home to most of the mature Asian single family offices with a 30-plus-year history. Many of these are closely related to the local family businesses, which account for over 60% of GDP in Hong Kong and 68% of listed companies.3 Bloomberg reported that of the top 10 Asian richest families in 2022, Hong Kong was home to five of them. The family wealth was usually generated for two generations or more, with funding sourced from the income of the family businesses. These represent the ‘old wealth’.

Mainland China has enjoyed tremendous economic growth over the past two decades and has generated an incredible amount of wealth. According to Ernst & Young’s 2021 report, the total AUM for mainland China was valued at $10.79 trillion.4 It is also estimated that mainland China is now the world’s fourth-largest asset management market. In 2022, Fortune 500 indicated that China has been performing exceptionally well economically, achieving top global ranking for three consecutive years in terms of number of companies. In contrast to Hong Kong, the development of both family businesses and family offices in mainland China is still very much in its early stage. The longest history of a large family business in mainland China is about 40 years, so most family businesses are still in their first generation. They represent the “new wealth”.

While wealthy Asian families, whether they are old wealth or new wealth, started to set up formal family offices later than their Western counterparts, they have a higher starting point and have benefited from learning from the experiences of their European and American counterparts. For this reason, it is predicted that the process of Asian family offices from the initial stage to relative maturity will be significantly shorter than their Western counterparts. It is also worthwhile to note that besides formally structured single family offices and multi-family offices, a third type is often seen in the region: the ‘embedded family office’ (EFO), which is a less formal structure in which some of the family office services are performed by employees or family members who are involved in the family business.

Family offices, unlike asset management companies, could manage both the financial and non-financial affairs of a family. In fact, a well-designed family office not only helps preserve the family wealth, but also helps to preserve family harmony, and family value and legacy. The author sees growing interest among Asian families, regardless whether they have a formal structure of family offices, in making a positive impact in society so that the family legacy can be passed on through generations. As a result, impact investing and philanthropy in this region have become the two major areas of consideration of Asian families.

Family offices and impact investing are a natural fit

Impact investing refers to the practice of making investments with the intention of generating both financial returns and positive social or environmental impact. It involves deploying capital into companies, organizations and projects that aim to address social or environmental challenges such as climate change, poverty, education or healthcare. The primary goal is to invest to create measurable and beneficial outcomes socially in addition to financial gains.

Given the function of family offices is to provide a range of services including investment management, estate planning, tax management and philanthropic activities, they are well positioned to play a unique role in investing for positive impact, unlike any kind of capital that exists out there. Added to this, they bring a history of innovation and an appetite to provide patient capital and a commitment to leave the world a better place. Here are a few detailed reasons why family offices have a natural advantage in doing impact investing.

Firstly, family offices can afford customization and flexibility which is often required with impact investments. They have the advantage to customize their investment strategies and adapt them to their specific goals and values. They can make short-term investments, but if needed they also have the strength to make long-term investments, which is a key element given that it often requires patient capital to achieve the desired social or environmental outcomes. Family offices, unlike private equity firms, also do not have the pressures to exit within three to five years, or at most 10.

For this reason, family offices are in a perfect position to tailor their impact investments to align with family values, priorities and philanthropic goals, whether those are in clean energy, affordable housing or even education initiatives. Furthermore, impact investing contributes to society in a way that allows the inheritance of family values, which means that it is easier to gain resonance, understanding and support from the younger generation of family members because they are more likely to have received an international education and are willing to participate in socially beneficial work.

Yet another reason impact investing is closely related to family offices is that it allows the alignment of family values and leads to greater cohesion within the family. Many high net worth families have a strong desire to make a positive impact on society and address social and environmental challenges. Impact investing allows family offices to align their investment strategies alongside their shared values and missions.

By emphasizing both financial returns and social impact, impact investing also enables families to achieve common prosperity and contribute to society. Impact investing provides an opportunity to not only generate financial returns, but also pass on a legacy of social and environmental impact to future generations. By combining investment with social benefit, impact investing creates a powerful synergy that not only generates returns but also contributes to the betterment of society.

This tangible impact not only provides a stable source of funding but also fosters a sense of accomplishment among family members and employees. This virtuous cycle also promotes long-lasting inheritance of family reputation and values, inspiring individuals to engage in more altruistic endeavors.

According to the HKUST-EY Family Office survey, over 90% of Hong Kong family offices have incorporated impact investing into their overall investment strategies;5 while one-third of family offices in Greater China are involved in impact investing. Moreover, many family offices have indicated that they will consider impact investing in the foreseeable future.6

From traditional philanthropy to strategic philanthropy

Traditionally, the prevailing belief in Chinese and other Asian cultures was that the most important role of the older generation – and patriarchs in particular – was to serve as role models for their families and inspire younger generations to follow their legacy in giving back to society.7

Previously Asian families engaged mainly in traditional philanthropy which is simply “cheque writing”, with limited due diligence and usually only the founding generation is involved. The author sees more and more families start to engage in strategic philanthropy nowadays, which has clearly defined philanthropic focus, making social impact; greater involvement in the giving process, investing time, skills and money; demanding, accountable, transparent outcome and due diligence from organizations they support; and involvement of multiple generations and external partners.

In 2018, Harvard Kennedy School reported that Hong Kong was Asia’s leading philanthropy hub, with assets invested in philanthropic initiatives totaling 3.3% of GDP.8 Hong Kong was also ranked fifth in the world for philanthropic assets in terms of proportion to GDP, behind the Netherlands, Switzerland, the United States and Italy. It was also the only Asian country/region to make the top 10 list. In 2019, a total of 15,700 charitable organizations were recognized by the Hong Kong’s Inland Revenue Department, contributing roughly HK$10 billion to philanthropic causes annually. The HKUST-EY survey reported that all single family office respondents in Hong Kong engaged in philanthropical activities, with a quarter of them conducted strategic philanthropy through formally structured family foundations.9


The wealth of Asian families has seen rapid growth in the past decade. As more and more families enter the wealth management industry in Asia, with their long- term focus and patient capital, they have the potential to create a greater positive impact in society and improve the quality of the wealth management industry as a whole in the long run.


  1. Campden Wealth, The Asia-Pacific Family Office Report 2022, Raffles Family Office 2022.
  3. Roger King Center for Asian Family Business and Family Office at HKUST, Overview of Family Businesses in Hong Kong 2022.
  4. EY Parthenon (Shanghai) Advisory Ltd, China Asset Management Report, 2022.
  5. Campden Wealth, The Asia-Pacific Family Office Report 2022, Raffles Family Office 2022.
  6. Campden Wealth, The Asia-Pacific Family Office Report 2022, Raffles Family Office 2022.
  7. Campden Wealth, The Asia-Pacific Family Office Report 2022, Raffles Family Office 2022.
  8. Campden Wealth, The Asia-Pacific Family Office Report 2022, Raffles Family Office 2022.
  9. Campden Wealth, The Asia-Pacific Family Office Report 2022, Raffles Family Office 2022.