Hong Kong’s family office industry will need to attract and nurture multi-skilled professionals to boost the industry development amid an exodus of talented professionals, a family office head told AsianInvestor.
“Hong Kong is obviously facing the challenge of brain drain across sectors… Financial services is one of our biggest industries and faces the most talent shortage in Hong Kong. Family offices, with no exception, face the same situation,” said Patrick Tsang, chairman of Hong Kong-headquartered single family office Tsangs Group.
Due to disruptions caused by Covid-19 restrictions and China’s tightening grip on the city, Hong Kong lost both family office businesses and talent to Singapore in 2022.
It cost the city an exodus of expats, especially in 2022. Official data showed that Hong Kong lost over 22,000 individuals from its working population since 2019.
Under such context, the Hong Kong government in late March announced that it will fund the establishment of a Hong Kong Academy for Wealth Legacy for “continuously nurturing and enlarging the talent pool serving and managing wealth in Hong Kong”.
To attract talent to Hong Kong, Tsang stressed that it is important to first understand the different skills required by a family office, compared with private banks and fund management companies.
“Compared to banks and other financial institutions, family offices are usually smaller, and the talent working for family offices, therefore, requires broader and more dynamic skill sets,” he told AsianInvestor.
“Family offices typically run a lean and mean structure and therefore could be quicker and more efficient during the decision-making process,” he added.
ESG, TECH IN FOCUS
Tsang also noted family offices’ rising demand for technology-related investments.
“Technology plays a crucial role in our future development. To attract global investors, Hong Kong needs to provide more support and incentives to talents with the knowhow in areas such as biotech, Web 3.0, fintech, and green tech,” he said.
With wealth in China’s Greater Bay Area continuing to grow, Hong Kong, as a gateway to mainland China, will gain “huge advantages” from such a large market, Tsang added.
As a result, talent with knowledge of the city cluster would also be sought after in the family office industry, he said.
Agreeing with Tsang, Kwan Chi-man, group chief executive officer and co-founder of Raffles Family Office, noted that family office services “extend far beyond investment management to encompass multi-generational financial planning, philanthropic advisory, wealth education, and more”.
“While Hong Kong possesses a significant pool of highly skilled professionals in the financial and professional service sectors, we need more talents who possess a comprehensive understanding of the role of family offices and the diverse range of skills necessary for success in this field,” he told AsianInvestor.
Kwan thought family offices’ focus on ESG will require more professionals with expertise in impact investing.
Meanwhile, he noted the knowhow of managing the client’s digital wealth is also crucial for the industry.
"We need expertise to deal with growing interest in alternative investments, including private equity and digital assets,” he said.
On that front, Raffles’ Hong Kong office has made several senior hires this year.
In December 2022, Raffles hired Zann Kwan from Bitcoin Exchange as the chief investment officer and managing partner for its newly established digital assets management arm Revo Digital Family Office.
To regain its competitiveness, Hong Kong initiated a family office campaign with policy support and tax incentives. It has a goal of attracting at least 200 of the world’s top family offices to set up or expand their operations in the city by 2025.
As part of the efforts, the government said the proposed Hong Kong Academy for Wealth Legacy will partner with the industry, professional service providers, and universities, and be supported by the government’s dedicated FamilyOfficeHK team.
The academy will offer training to industry practitioners and next-generation wealth owners across the world, on subjects like capital preservation and inheritance.
It will also cover topics around arts and culture, green and sustainable investments, and philanthropy, to match the multiple new aspirations of global wealth owners, the government said.
“The creation of the new Hong Kong Academy for Wealth Legacy will ensure there is a strong ecosystem to serve families and attract more talent to the space,” said Karmen Yeung, national head of private enterprise, KPMG China.
In addition, the academy will develop partnerships with global peer organisations to build a network of wealth management professionals.
Similarly, Tsangs Group recently founded a private networking club called the Hong Kong Ambassadors Club, with support from the Hong Kong government.
Through networking events across the world, the family office hopes the club will help promote Hong Kong as an attractive destination for businesses as well as career development.
“To attract talent back to Hong Kong, we have to reconnect with the rest of the world, and rebuild the reputation of Hong Kong,” Patrick Tsang said.
With the government offering different incentives and policy support, including the Hong Kong Academy for Wealth Legacy, Tsang is optimistic that the field will create more opportunities for both investors and financial professionals.