Just as the Art Basel fair in Hong Kong hits its stride this week, one of the city’s top museums will shut its doors to the public and welcome billionaires for an event aimed at sending the world’s super rich a message: the city is back in business.
Canadian business mogul Paul Desmarais III, Yahoo co-founder Jerry Yang, Sequoia Capital China’s Neil Shen, and local tycoons Richard Li, Adam Kwok and Ronnie Chan are among those set to attend the Wealth for Good summit in Hong Kong on March 24, according to a statement.
The Bill and Melinda Gates Foundation’s Robert Rosen will also participate in the event, where more than 100 representatives from global family offices will discuss asset and wealth management opportunities in the city. The government is planning to roll out a tax concession for single family offices among other policies on Friday, Hong Kong Secretary for Financial Services and Treasury Christopher Hui said during a Bloomberg Television interview on Tuesday.
The gathering at the Hong Kong Palace Museum, aimed at attracting new family offices, will be a showcase of soft power for Hong Kong, whose global standing as a finance hub has been tarnished by years of protests, pandemic restrictions and Beijing’s tightening grip. That’s helped drive an exodus of wealth and a boom in family offices to rival hubs in Singapore and Dubai.
“We acknowledge that competition is keen,” said Joseph Chan, under secretary for financial services and treasury for the Hong Kong government. “Many different financial centres are also striving to gain market share in this business.”
Stronger Connections
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Hong Kong has made attracting family offices — set up by the super rich to manage their lives and finances — a key mission under Chief Executive John Lee. In a statement announcing the event, officials said it would build stronger connections and encourage more of them to come to the city.
“It will not only enhance Hong Kong’s attractiveness and position as a family office hub, but also whip up the demand for asset management and other related professional services,” Finance Secretary Paul Chan said in the March 6 statement.
The need for such an event speaks to Hong Kong’s declining fortunes. Once an easy sell to the global rich thanks to its low taxes, connectivity to China and a vibrant arts and philanthropy scene, Hong Kong has set a modest target of getting at least 200 family offices to either set up or expand operations by the end of 2025.
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By comparison, wealthy entrepreneurs have been flocking to Singapore, where the number of family offices jumped to 700 in 2021 from just 400 a year earlier, according to the Monetary Authority of Singapore. Hong Kong’s asset and wealth management businesses grew by just 2% to US$4.53 trillion in 2021 - hampered by a 6% decline in private banking and private wealth management assets - Singapore boosted assets by 16% to US$4.04 trillion over the same period.
Singapore’s success has been driven in part by domestic factors, including tax cuts for family offices, a fast-track program for rich applicants to become citizens and the country’s relative stability and skill at handling the pandemic.
The city-state also benefited from troubles elsewhere, from severe lockdowns across mainland China and Hong Kong to the continuing crackdown and arrest of entrepreneurs that have prompted many to move abroad. The disappearance of high-profile banker Bao Fan has only added to the jitters.
At the summit, talks will focus on “wealth for” themes including technology, art, green and philanthropy. The goal is to showcase Hong Kong’s advantages as a key hub not just for finance.
Ruth Shapiro, chief executive officer of the Centre for Asian Philanthropy and Society, said the city has long been attractive to global philanthropies thanks in part to its relatively lax tax treatment of money donated abroad. Singapore attempted to neutralize that edge in February by allowing 100% exemptions for family office donations overseas.
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An expert at encouraging the wealthy to give back, Shapiro said any event that gets the rich to do more for society is a positive. And while confabs in the West may often lead nowhere, a government-run event in Asia can lead to action.
“Families in Asia with wealth are still running businesses for the most part and so they tend to work aligned with the government,” said Shapiro, who plans to attend the summit. “These families are pretty adept at looking at government cues and seeing where the energy is, what the action is.”
Under Secretary Chan said the government invited family offices from Hong Kong, Mainland China, Asia, the Middle East, Europe, and the Americas and the response was “quite overwhelming.” Shapiro, whose organization’s Chairman Ronnie Chan is helping with the philanthropy stream, said the event is fully booked. UBS Group AG Wealth Management APAC Co-Head Amy Lo and JPMorgan Chase & Co. Executive Chairman of Global Private Bank Andrew L. Cohen will also be moderating panels.
“There’s a lot of uncertainty about China right now but it’s a huge country with incredible resources,” she said. “So to write off Hong Kong is kind of to write off China and you can’t do either.”
