Institutionalised single family offices in Hong Kong are expanding their footprint into the competitive wealth management market to offer their investment opportunities and capabilities to others outside the family.
For NF Trinity and Sun Hung Kai & Co, this is driven by the rising interest from wealthy families to have their assets managed by a mature family office, while bypassing the traditional model of private banks and consultancy businesses with layers of relationship managers.
NF Trinity is the family office of Hong Kong business conglomerate Nan Fung Group. By obtaining Type 4 and 9 licences from the regulator in late 2021, it gained the capability to provide advisory and asset management services to third parties in town, transforming NF Trinity into a multifamily office.
“We have seen inbound interest from high-net-worth individuals, families, and family offices who were essentially looking for the same investment objectives as us: absolute compounding returns from well-diversified sources across the cycle,” said Helen Zhu, NF Trinity’s managing director and chief investment officer.
“Over the last couple of years, we’ve been thinking about what kind of multifamily office, and what type of services and infrastructure we should have, to position ourselves for the medium to longer term,” Zhu told AsianInvestor.
It began with close friends of Nan Fung, who went to Zhu and said they were looking for a mature and institutionalised family office that has access to investment opportunities across the global public and private markets.
Zhu stressed the importance of alignment of interests, meaning NF Trinity ensures it has sufficient conviction in each investment by investing itself before offering opportunities to others.
“For people who have the same values and objectives as us, we've been happy to work together to aim for common goals and build this into a more comprehensive platform,” Zhu said.
“Hopefully, over the medium to longer term, we can build ourselves into a leading multifamily office in the region.”
Another de facto family investment vehicle in town, Sun Hung Kai & Co, also launched a dedicated family office solutions platform a year ago to transform into a multifamily office.
Sun Hung Kai & Co is controlled by chairman Lee Seng Huang's family. It specialises in global alternative investments including private equity, private debt, hedge fund, and real estate, with about HK$16.3 billion ($2.1 billion) in investment assets as of June 30, 2023, according to the firm's interim results announced in August.
The firm is unrelated to Sun Hung Kai Properties, from which the Lee family acquired the business in 1996.
Sun Hung Kai & Co’s family office solutions service is incorporated under its fund management arm, the Sun Hung Kai Capital Partners (SHKCP).
By launching family office solutions, the firm appointed Allen Sing, SHKCP’s managing director overseeing the hedge fund team, to lead the third-party wealth service.
The family office solutions team now consists of 19 members, including 13 investment managers and six operational and legal staff.
Sing previously managed hedge fund portfolios for 15 years at SAIL Advisors, an affiliate of the Mari-Cha Group (formerly known as Search Investment Group), the family office of Hong Kong Duty Free co-founder Robert Miller.
The Mari-Cha Group also transitioned to a multifamily office model over the years.
“What was the takeaway from working with the family office of Robert Miller and SHK & Co? The principals do not want to deal with layers of relationship managers — rather, they want direct engagement with the investment professionals,” Sing told AsianInvestor.
“We hope to do the same thing for our clients when they come on board,” he said.
Since the service was launched in the fourth quarter of 2022, its assets under management reached $45 million (including external asset manager), as of the end of June, 2023, according to the interim results.
Sing also emphasised the importance of aligned interests with clients, as the firm only offers investment opportunities where they have a stake themselves.
“Because there are so many different investments in our ecosystem, we want to be able to offer them the flexibility to invest in different sizes,” Sing said.
Such a structure provides families and wealthy individuals who don’t want to commit huge sums — sometimes dozens of millions of dollars — with access to investment opportunities through co-investment arrangements, which will increase the scale of investment and improve the negotiating position for all parties involved, he noted.
“We value them as business partners rather than just our clients,” said Sing.
Meanwhile, as an established alternative investment company, SHK & Co has access to some closed-end managers and can enjoy a competitive term or fee structure as a long-term limited partner (LP), which is also something that it can offer to other investors, he noted.
The firm is targeting different types of clients, from new investors who want their money managed by professionals, to sophisticated ones who aim to scale up investments and have more access to deals.
It is currently onboarding its seventh client. Existing clients include families, family offices, and ultra-high and high-net-worth individuals across different industries in Australia and Asia, predominantly in Hong Kong, according to Sing.
The headcount, structure and assets of Sun Hung Kai & Co have been updated.
AsianInvestor will be hosting its Family Office Briefing in Hong Kong on November 28. For more details, click here.