Date
17 October 2017
With wealth and control already smoothly passed to the sixth generation, the death of David Rockefeller  won’t affect the continued prosperity of one of history’s most fabled families. Photo: Reuters
With wealth and control already smoothly passed to the sixth generation, the death of David Rockefeller won’t affect the continued prosperity of one of history’s most fabled families. Photo: Reuters

What local billionaires can learn from the Rockefeller family

David Rockefeller, the grandson of the family patriarch and America’s first billionaire John D. Rockefeller, died on Monday at 101. He had gone through two world wars and and ridden numerous business cycles. However, his death won’t mean the fall of one of history’s most fabled families

John D. Rockefeller, born into a large family in 1839, started a trading business in 1850. The family founded Standard Oil in 1870. John built a formidable monopoly and once controlled 90 percent of all oil in the United States at his peak. That made him one of the three most admired people in the US, together with former US president Abraham Lincoln and Benjamin Franklin.

Being raised by a religious mother made him not only a successful businessman but also a famous philanthropist. The charitable giving began with his first job as a clerk at age 16, when he gave 10 percent of his earnings to charity, which has become a family tradition.

The Rockefeller family has never had any feud like we’ve seen in local dramas. The family wealth has been passed to the sixth generation without any major family fights. That’s unbelievable for Chinese billionaires.

The Rockefeller family had net assets of US$11 billion as of last year, making it the 26th richest family in the US, according to Forbes.

However, the family has very complicated and mysterious structures like family trusts and family office to manage the vast wealth. Therefore, it’s widely believed that the actual family wealth would be double the book value.

In fact, the Rockefeller business empire has already become highly diversified. Various family members can offer advice and be involved in the decision-making process. The family leader would then decide upon the direction then hand over the execution to professional managers.

At present, family trusts hold the bulk of the fortune, which is largely invested in stocks through various funds. The Rockefeller family holds up to 525 stocks worth a total of US$5.2 billion by the end of last year, with big internet firms like Facebook, Google among some of the key holdings.

Most of Rockefeller’s descendants graduated from elite universities like Harvard and Yale and they pursue their own careers. There are economists, physicists, environmentalists and academics in the family. David had six children. 

Their diverse expertise and contacts bring useful perspectives to preserving the family wealth, too.

The beauty of a family trust and family office is the check-and-balance effect among family members. That would help prevent power concentration in one particular family member or family fights over wealth.

This article appeared in the Hong Kong Economic Journal on Mar. 22

Translation by Julie Zhu

[Chinese version 中文版]

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RT/RA

Hong Kong Economic Journal columnist

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