Many family businesses and entrepreneurs in Hong Kong are facing the challenge of wealth succession.
Hong Kong’s economy started to take off in the 1960s, and many of the first-generation patriarch or even the second generation are retiring.
Up to 59 percent of rich families in Asia Pacific expect a generational transition in the next decade, far above the global average of 43 percent, according to the Global Family Office report issued by UBS last year.
That means more than half of rich families in the region would go though family succession within 10 years. That would not only determine the future of rich families but also hold sway in broad economic growth.
Mrs. Yeung, boss of the old Sichuan restaurant Wing Lai Yuen, has made great efforts in ensuring the family wealth and business succession for years.
“I started to invest in properties and car parks several decades ago. I also taught my children to buy hard assets like properties. All of them own a certain amount of assets,” she said.
However, investment success has turned out to be an impediment in passing the family business to the next generation.
“Most of my children can live comfortably on rental income. And they are reluctant to take over the restaurant business, which is very demanding,” she said.
Yeung tried to attract outside talent. She created an apprenticeship program to train people from scratch. But many young apprentices could not put up with tedious training and quit quickly.
She then introduced an entrepreneurship scheme, but very few participants have had the perseverance to stay to the end.
Chan Yue-Kwong, former head of Chinese fast-food chain Cafe De Coral — he served as the company’s president since 1989 until last year — offered some useful advice.
Chan founded the Legacy Academy in Hong Kong in 2012. He believes communication among family members is very important. His family would gather each month to discuss matters ranging from holiday plans to important issues.
Chan also cited the example of Lee Kum Kee, a famous family-owned sauce company. Chan said the Lee family would meet 16 days each year to discuss family issues and all members stay very close to one another.
The Lee family has drafted specific rules of conduct for its members, such as discouraging divorce or affairs and passing on family values along with the family wealth.
Family wisdom, legacy and values are as important as wealth succession, Chan said.
This article appeared in the Hong Kong Economic Journal on May 2
Translation by Julie Zhu
[Chinese version 中文版]
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