INSIDE THE MIND OF A CHINESE HNWI: 11K CONSULTING AND HAWKSFORD: On Investment, Lifestyle, UK, Singapore and Trust - Tsangs Group
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1 1 K C O N S U LT I N G A N D H A W K S F O R D :
T H O U G H T L E A D E R S H I P A RT I C L E
INSIDE THE MIND OF A
CHINESE HNWI:
On Investment, Lifestyle, UK, Singapore and TrustKEY FINDINGS:
1.
Chinese high-net-worth-individuals (HNWI) are generally
concerned about an economic slowdown, but this does not
mean that they will cut or reduce their spending on lifestyle
choices.
2.
Health is the real wealth for Chinese HNWIs. Wellness is
the new big trend. Quality of water, air, energy, and mental
wellness matter to them.
3.
Chinese HNWIs’ investment strategies for 2021 include
increased investment in Chinese firms, and the Chinese private
healthcare and technological sectors, as well as integration of
environmental, social and governance (ESG).
4.
Despite ongoing Brexit negotiations and COVID-19, the UK
remains a top choice for Chinese HNWIs deciding on where
to pursue their investment goals and lifestyle aspirations. The
ongoing trade war between the US and China has discouraged
many Chinese HNWIs from investing in the US, and this capital
is being rerouted to the UK.
5.
Despite COVID-19, Singapore remains a top choice for Chinese
HNWIs looking to carry out their investments in the Asian
region. Chinese HNWIs will continue to choose Singapore to
set up family trusts for succession and legacy planning.
6.
To gain trust with Chinese HNWIs, it is crucial to understand
traditional Chinese values that prioritise honour and
trustworthiness in any relationship, and that promote the idea
that “we must become friends first before we do business”.July 2020 (London and Singapore) – China is the world’s second-largest
wealth market, with the largest number of people in the top 10% of global wealth
distribution. What happens in China is key.
It is widely believed that the COVID-19 outbreak For this 11K Consulting and Hawksford’s Thought
has already caused the largest global recession in Leadership Article, 13 experts in China, Hong Kong,
history and has had a substantial impact on the global Singapore and the UK, who are either Chinese
high-net-worth individuals (HNWIs) market. China HNWIs themselves, or who advise Chinese HNWIs
currently has 2.3 million HNWIs (with not less than on their investment strategies, were asked to offer
$3 million in investable wealth), including almost their unique insights into these topics.
26,700 ultra-high-net-worth individuals (with more
than $30 million in investable wealth). High-profile interviewees include: Alice Quek and
Peter Zhu of Hawksford; Patrick Tsang of Tsangs
How are these wealthy Chinese people reacting to Group; Ryan Li of Dere Street Capital and
the coronavirus pandemic? Has COVID-19 changed Sino British Summit; Dominic Volek and Yat Wan
their investment portfolios? Are they concerned about Yeung of Henley & Partners; Chris Godfrey of
an economic slowdown following the COVID-19? Do HBA Residential; Peter Lu of Baker McKenzie
they think that the UK and Singapore are still good LLP. See Notes to the Editor for the full list of
choices for their investments? How can individuals interviewees.
build trust with Chinese HNWIs in this uncertain
time?ON LIFESTYLE
Q. Are Chinese HNWIs concerned about an
economic slowdown following COVID-19? Have
their current spending or future spending plans on
lifestyle choices been affected by COVID-19?
Chinese HNWIs are generally concerned about an economic
slowdown, as this may translate to a reduction of their net worth.
However, this does not mean that they will cut or reduce their
spending on lifestyle choices as result. Instead, the meaning of luxury
has seen a shift; living a healthy lifestyle and investing in private
healthcare are becoming the ultimate luxuries.
Alice Quek, Director, Private Client Services, Zhu commented that premium access to unrivalled
Asia, Hawksford, explained that HNWIs are healthcare options, as well as wellbeing programmes
concerned about economic downturn, “especially so if that promote non-hedonistic lifestyles, and “ascetic
the bulk of their wealth is tied up in financial assets.” detachment from earthly pleasures and vices” are
becoming increasingly sought-after in the last few
“However, when it comes to years of this decade; and the pandemic seems to have
only confirmed the solid foundations of this “new-
their spending habits on lifestyle wave” movement.
choices, COVID-19 does not
have a direct impact. This is “In the end, it’s not a secret
also seen in the sale of luxury that money can’t always buy
goods following the easing of good health and that’s when
the lockdowns in South Korea treatment options reserved for
and China. The Hermes flagship the few become the ultimate
store in Guangzhou, China, made ‘luxury’ to battle for.”
a record $2.7 million on the first
day post lockdown.” Louie Shum, an international award-winning
interior designer and owner of Ryota Kappou
Peter Zhu, Chief Operating Officer PRC, Modern, a Michelin One-star Japanese restaurant in
Hawksford, added that he has seen a healthy Hong Kong, said: “There is no doubt that an economic
resurgence of confidence by Chinese HNWIs lately, slowdown has already come. Hong Kong HNW
thanks to the response of the local economy. clients’ lifestyle choices will be focusing more onlocal high-end spending, as they can’t travel to other “Although many are not planning to resume
countries for the foreseeable future. There are also international travel immediately, a considerable
more concerns about wellness and healthy ingredients. number of Chinese HNWIs are already thinking
That’s why, as a fine-dining restaurant, we have still ahead. Some are concerned about China’s global
been able to turn a profit in the last three months; reputation and consequently how welcomed they
clients trust our service, hygiene system and our high- would be as Chinese passport holders when traveling
quality food.” or investing abroad.”
Wellness is becoming a big trend in Hong Kong Jeremy McGivern, Founder, London’s
amongst HNWIs and Staycation (Stay vacation) has Mercury Homesearch, however, said that the
become a new popular trend worldwide and we all majority of Chinese HNWIs do not seem particularly
can benefit from this. Shum explained: concerned about an economic slowdown.
“Quality of water, air, energy, “Some think that there could
and even mental wellness be a disastrous recession or
matter to them. As an interior depression but the majority
designer, I recently invested would rather be invested in
in ‘Wellness Intelligence for assets rather than hold excess
Property Development’ and cash. They see the amount of
will build a project using the money being pumped into the
latest technology, taking all system by policy makers (the
the wellness elements into G-10 countries have pledged $15
consideration to provide trillion which is the equivalent of
investors with healthy 18.5% of the value of global stock
environments to live in.” markets, not to mention low
interest rates and the fact that
Yat Wan Yeung, Senior Client Advisor, Senior
banking regulations in the UK
Manager, Henley & Partners UK Ltd, said that
there has been concern about mobility among her and US will be relaxed) as highly
Chinese HNW clients. inflationary for asset prices.”ON INVESTMENT
Q. Has COVID-19 changed Chinese HNWIs’
investment portfolios? What sectors will see
greater interest of investment in 2021?
While COVID-19 has slowed down or even put a pause on some
investment opportunities and caused some restructuring of Chinese
HNWIs’ investment portfolios to mitigate potential losses in the
short-term, it is predicted that the long-term investment objectives
and the strategy of diversifying investments of Chinese HNWIs for
the generations to come remain almost the same.
In terms of sectors, private healthcare and most HNWIs have existing
technology are the key investment growth areas
among Chinese HNWIs in 2021 and beyond. The
investments in these sectors,
Chinese Government’s recent announcement of COVID-19 has highlighted
new infrastructure investment priorities will advance the need to advance on
private investment in 5G information technology opportunities in these sectors.”
that helps apply internet, big data, AI and other
technologies to traditional sectors. Patrick Tsang, Chairman, Tsangs Group, a
China-focused family office headquartered in Hong
Alice Quek, Director, Private Client Services, Kong, said that it has been more difficult to co-
Asia, Hawksford, who has advised hundreds of invest, and close deals in the short term during the
Chinese HNWIs on their investment strategies in COVID-19 pandemic. “During this time, we have
previous roles and now acts as a professional trustee been focusing on improving current projects, rescuing
over such wealth, said: those current investments that are not doing as well
and holding off on immediate investments. I believe
“Clients are now looking to Artificial Intelligence (AI), Blockchain, Fintech and
increase their investments Biotech will perform well in the short and medium
term.”
in areas like technology and
healthcare, as these sectors Ryan Li, CEO, Dere Street Capital and Sino
are experiencing growth during British Summit, whose family has been on Hurun
the COVID-19 pandemic. While Report’s Rich List (equivalent to Forbes China’sRich List) for the past 2 decades, added that due to “Chinese HNWIs are increasingly replacing
economical and political situations around the world, investments in impractical luxury goods with activities
more Chinese investors will be investing in Chinese which safeguard health. While this was occurring prior
firms in China and Asia. to COVID-19, the crisis has certainly accelerated
this trend. Increasingly, living a healthy lifestyle and
“The US and China have already investing in private healthcare is becoming the ultimate
luxury.”
entered into a technological
sector battle, meaning that Lu noted that Chinese HNWIs are also increasingly
Chinese investors will be less demanding that the companies in which they invest
feature positive practices regarding environmental,
likely to invest in technological
social, and governance (ESG) issues, promised
firms abroad, but more likely alongside a good return on their investment.
to invest in Chinese firms who
are strong in China and Asian “In a recent report, a percentage
regions.” as high as 81% of Chinese
millionaires demanded that
Andrew Wong, Chairman and CEO, Anli
Holdings Ltd, echoed this sentiment. “Chinese
brands conduct themselves in an
UHNWIs or HNWIs tend to make long-term ethically responsible manner. As
investment plans, which won’t easily be affected by a result, areas which integrate
a short-term crisis such as COVID-19. In fact, the
this demand into their post-
investment of our Chinese HNW clients has remained
stable since The Federal Reserve cut US interest rates COVID strategies may fare well.
and implemented Quantitative Easing. In the stock Likewise, luxury houses that
market, the focus has been shifted to new economy refuse to adopt a socially-aware
categories, such as Amazon and Tencent, and biotech
companies.”
ethos may lose their brand
value.”
On the other hand, Peter Lu, Partner, Baker &
McKenzie LLP, said that wealthy investors around
the world have not treated COVID-19 as a transient
economic setback.ON THE UK
Q. Do Chinese HNWIs think the UK is still a
good place to invest in the post-COVID-19
period?
Despite ongoing Brexit negotiations and COVID-19, all experts
interviewed believe that the UK will remain a top choice in Europe
for Chinese HNWIs deciding on where to pursue their investment
goals and lifestyle aspirations. The number of UK tier-1 investor visa
applications by HNWIs from China rose by 32% year on year to
202, according to British private equity firm Growthdeck.
Peter Lu, Partner, Baker & McKenzie LLP, Vicky Tsan, Senior Associate - Licensed
pointed out that certain economic and political events Conveyancer, Axiom Stone Solicitors, said the
have caused many Chinese HNWIs to turn their UK will remain attractive for real estate investment
attention to the UK, and this will endure in spite of opportunities in the post-COVID-19 world.
COVID-19. “First of all, the exchange rate of GBP is very
attractive at the moment. Also, UK offers the
“Firstly, the ongoing trade war cheapest tax rate among other Western countries,
e.g. USA, Australia. On the other hand, an additional
between the United States and 2% stamp duty land tax to overseas buyers will
China has discouraged many apply, starting on 1.4.2021; i.e. if overseas buyers
HNWIs from China investing buy property now and the completion takes place
after April 2021.This is also the reason for HNWI to
in the US. This capital is being
purchase properties that complete before 1.4.2021.
rerouted to the UK. Second,
Brexit has likewise caught the “Also, UK buy-to-let properties
eye of many entrepreneurial offer the best yield compared to
HNWI investors, as they are properties in other countries.
acutely aware that the UK will Clients can usually achieve
look to grow its economy once 6-8%, while the yield in China,
the separation is complete.” especially Shanghai, will be only
2-4%.”Chris Godfrey, Global Principal, HBA Patrick Tsang, Chairman, Tsangs Group,
Residential, said that, in the high-end architectural believes that no matter what happens – including with
and interior design world, famous Chinese architects Brexit and COVID-19 – the UK will always do well.
and designers often cite London as a place for
inspiration and trend-setting. Godfrey believes that, “London is the best city in the world. It is close to
despite COVID-19 and Brexit, London will always be Europe and its art, culture, sport and education
an attractive world-class city due to its rich history transcends that of America and Asia. In London,
and cultures. you can engage in politics, finance; education, music,
culture and not have to go to different cities. London
Yat Wan Yeung, Senior Client Advisor, Senior is really the centre of the world, the only place that is
Manager, Henley & Partners (H&P) UK Ltd, truly international. I will always support the UK. There
believes that the UK will remain attractive to Chinese are always things to invest in.
HNWIs due to its good education, political and
regulatory environment. “Having said that, Brexit took
“Chinese parents are particularly keen on providing
too long. Time was lost. Time is
their children with a world-class education in a money. The UK must also not be
safe environment. They also often wish to obtain complacent. With globalisation,
permanent residence so there is a lifelong linkage with
the UK is no longer as much of
the country.
an influential power as before.
“The UK is also very attractive Good systems and strategy need
as an option that permits to be in place for the coming
Chinese HNWIs to globalise generations.”
and diversify their investment
portfolios. Real estate and
financial products are popular
starting points, but plenty are
also exploring the possibility of
either starting up a new business
here in the UK, or starting up an
overseas subsidiary.”ON SINGAPORE
Q. Do Chinese HNWIs think Singapore is still a
good place for their investments in the post-
COVID-19 period?
Despite COVID-19, Singapore is expected to remain a top choice
for Chinese HNWIs to carry out their investments in Asia, owing to
its political stability, good infrastructure, transparency in its capital
markets, strong reputation as a financial centre, and a professional
and well-regulated financial sector.
Singapore remains the most liveable city for Asian “Over the years, we have seen
expats for the 14th year in a row, ahead of Japan and
Australia, according to the latest ECA International’s
a strong trend in referrals to
Location Ratings. Singapore has also been ranked again Hawksford from private banks,
as the world’s most competitive economy according family offices, law firms and tax
to the Institute for Management Development (IMD)’s advisors, requesting us to set up
World Competitiveness Ranking 2020. Based on
the international report, robust international trade, family trusts for Chinese HNWIs
the availability of skilled talent and cutting-edge tech and UHNWIs.”
infrastructure were among key factors for Singapore’s
strong ability to compete. Dominic Volek, Managing Partner and Head
of Southeast Asia, Henley & Partners Ltd,
Alice Quek, Director, Private Client Services, agreed and said: “Even with the partial lockdown
Asia, Hawksford, said: “Chinese HNWIs are one in place in Singapore, real estate activity has been
of the largest groups of foreign investors of real estate picking up. According to a leading real estate firm,
in Singapore. Being a common law country, Singapore three Chinese clients had bought six apartments
is often the top choice for Chinese HNWIs to set up in Singapore worth a combined SGD20 million in
family trusts for succession and legacy planning. Trust May without any virtual tours, showcasing Chinese
companies operating in Singapore need to be licensed confidence in the Singapore property market.
and regulated by the MAS, and this provides Chinese
HNWIs with peace of mind.“From our point of view, the Ryan Li, CEO, Dere Street Capital and Sino
British Summit, said that he has seen billionaires
ability to reside in a country with relocating from China to Singapore in recent years.
a world-class healthcare system
is at the forefront of Chinese “In terms of politics, Singapore is
HNWIs motives for considering very similar to China, such as in
investment migration and to terms of the political structure
achieve this through a real estate and how the country is run. The
investment makes sense for language barrier is extremely
them.” low. Besides HK, Singapore is the
number 1 choice in the region.”ON TRUST
Q. How can individuals build trust with Chinese
HNWIs in this uncertain time?
Sincerity, care, patience, commitment – these are fundamental for
gaining trust and building long-term friendships with Chinese HNWIs
and UHNWIs.
Alice Quek, Director, Private Client Services, “At HBA Residential, we have
Asia, Hawksford, said that trust is built over time,
citing a famous Chinese saying “一日不忠百日不用”,
won 3 new Chinese projects
meaning that “If someone is untrustworthy for a day, over the past 6 months. All of
do not engage with him for 100 days.” them are recurring clients who
we worked with 2, 3 or 4 years
“Trust is fundamental to all ago and who have came back.
relationships, and to build trust, It’s because we deliver on our
it is important to be honourable promises every time. That’s how
and consistent. Generally, you build trust with Chinese
Chinese HNWIs and UHNWIs HNW clients.”
trust people that they have
known for a long time.” Joyce Zhou, CFA, Director Private Banker
at Barclays Private Bank, said professionalism
Chris Godfrey, Global Principal, HBA is key. “Businesses should demonstrate their value-
Residential, who works with numerous Chinese add to clients – that they’re there to serve, and that
UHNWIs on Forbes China’s Rich List, said building they’re the go-to brand in their respective field. Also,
trust with Chinese HNWIs is not about having a few be patient. It takes time to build trust; whilst the
meetings, but is about delivering promises; in these incubation period can be somewhat long, it is worth
uncertain times in particular, this is more valuable than the wait.”
ever.Patrick Tsang, Chairman, Tsangs Group, said Andrew Wong, Chairman and CEO, Anli
sincerity and showing care is key to building trust. Holdings Ltd, gave a practical tip on building trust
with Chinese HNWIs.
“In Chinese culture, we have
to become friends first before “For UHNW clients, before
we do business. Sincerity is they ask for your opinions, they
key. I need to get to feel that usually already have some ideas
you are sincere and value this in mind. So what you should
relationship. Also, you need to do is to provide more options
care. If we invest in this company or better options instead of
or person, they have to have disagreeing with their ideas –
integrity.” because what they are really
looking for is a problem solver.
Ryan Li, CEO, Dere Street Capital and Sino For instance, Mainland Chinese
British Summit, said it is a very closed circle in
China. Trust between friends and referrals from
investors are not familiar with
friends are worth more than anything else. regulations and rules in HK or
overseas. What we should do is
“The stronger bond you can build is to be referred by
to provide professional advice
a connection you trust. The best contract you can get
in China is to be referred by a close friend.” in those areas and solve their
problems.”NOTES TO THE EDITORS: This Thought Leadership Article was conducted by 11K Consulting, a UK’s leading Chinese luxury PR and communications agency; and Hawksford, a leading provider of corporate, private client, and fund administration services. This is part of 11K’s China Insights Hub (https://11kconsulting.com/hub/) initiative to educate, inform and inspire our audiences on different topics about the evolving Chinese market. Here is a full list of interviewees who were interviewed for this Article (not in any order): 1. Alice Quek, Director, Private Client 8. Andrew Wong, Chairman and CEO, Services, Asia, Hawksford Anli Holdings Ltd 2. Peter Zhu, Chief Operating Officer 9. Louie Shum, an international award- PRC, Hawksford winning interior designer and owner 3. Patrick Tsang, Chairman, Tsangs of Ryota Kappou Modern Group 10. Joyce Zhou, CFA, Director Private 4. Ryan Li, CEO, Dere Street Capital Banker at Barclays Private Bank and Sino British Summit 11. Peter Lu, Partner, Baker McKenzie 5. Chris Godfrey, Global Principal, HBA LLP Residential 12. Jeremy McGivern, Founder, Mercury 6. Dominic Volek, Managing Partner and Homesearch Head of Southeast Asia, Henley & 13. Vicky Tsan, Senior Associate - Partners Ltd Licensed Conveyancer, Axiom Stone 7. Yat Wan Yeung, Senior Client Solicitors Advisor, Henley & Partners UK Ltd
A B O U T 1 1 K C O N S U LT I N G :
11K Consulting is a UK’s leading China PR and communications agency for companies who
want to target and influence Chinese investors, U/HNWIs and luxury consumers in China,
HK and the UK. Our clients are a mix of international and emerging property developers,
interior design, architecture, luxury, education and retail companies in the UK and Europe.
www.11kconsulting.com
A B O U T H AW K S F O R D :
Hawksford is an international provider of Corporate, Private Client and Funds services.
We are trusted to deliver efficient administration services to large and multinational
corporates, FTSE listed companies, and SMEs as well as entrepreneurs, HNWI individuals and
intermediaries. Hawksford has provided wealth structuring solutions for 60 years. The multi-
jurisdictional private client offering is built on long-term, steadfast and personal relationships,
founded on a deep understanding of what matters to clients, now and in the future.
Hawksford.com/privateclient
C O N TA C T U S :
If you would like to speak to any of the interviewees above or to 11K about your Chinese
PR and marketing strategy, please contact Sally Maier-Yip, Founder & MD, 11K
Consulting, at sally@11kconsulting.com or +44(0)7841377018.
If you would like to speak to Alice Quek, Director, Private Client Services,
Asia, Hawksford, about wealth planning or structuring, please email her on
alice.quek@hawksford.com.You can also read
