Although family offices have existed among the overseas Chinese community, it has risen to prominence among the first generation high net worth (HNW) individuals in the last decade. As per the RBC World Wealth Report 2015, China’s population of HNW individuals grew 18% in 2015, and now sits at 758,000. The total wealth of this group is estimated at $3.8 trillion. The new generation of family offices includes Blue Pool Capital of Hong Kong, which manages part of the wealth of Jack Ma and his partner Joe Tsai.
These new Chinese family offices have become an important source of capital as sovereign wealth funds have less money to invest and US tech investors are becoming more and more cautious. Recently Qihoo 360 Technology, a Chinese internet company, abandoned its US listing and went private with a generous valuation of $9.3bn. Similarly, the finance arm of Chinese ecommerce group JD.com was also able to raise funds locally more quickly that it had anticipated.
Many of the self-made billionaires in technology sector have started family offices as they chart their succession plans to pass on their accumulated assets to their offspring amid increasing uncertainty in the country’s financial market.
Source: Financial Times, March 30, 2016