This page contains a Flash digital edition of a book.
FAMILY BUSINESS Asia


MEETING OF MINDS


PATRICIA WOO TEP IS A FUND AND TRUST


LAWYER WITH KING & WOOD MALLESONS,


FOCUSING ON WEALTH MANAGEMENT AND


SUCCESSION PLANNING FOR AFFLUENT


FAMILIES. SHE IS ALSO A


CHARTERED ALTERNATIVE INVESTMENT ANALYST.


Vincent Lam is Chief


Financial Offi cer of a Hong Kong-based top-tier family


offi ce and Doris Ma is Head of Relationship Management of a multi-family offi ce serving Asian families


Patricia Woo discusses family offi ces in Asia with veteran advisors Vincent Lam and Doris Ma


PATRICIA The concept of a family offi ce is like the Indian story of the blind men and the elephant. People have diff erent views on what a family offi ce is or should be. Many lawyers look at it as a tool to organise assets and coordinate decision-making within the family. But in my experience a family offi ce can also be proactive and innovative in the creation of wealth and other values. What do you think ‘family offi ce’ represents? VINCENT Wealth creation is indeed at the core of many family offi ces in Asia. Property families tend to have more formal family offi ces that function as internal investment managers. But there are many hidden gems – very often, the fi nancial controller or head of fi nance of the family business also manages the chairman’s personal investments and private banking relationships. DORIS I had my fi rst contact with a family offi ce when I was still a banker providing fund services to a single-family offi ce. It was a separate entity from the family business to deal with estate planning and fi nancial management. Vividly I can recall it was like a generalist going between specialists like lawyers, accountants, bankers and real estate managers.


PATRICIA Quite unlike both of you, my involvement with family offi ces as an external lawyer is project- based. I try to understand the family, its business and assets, and consider regulatory and tax issues to come up with a suitable structure, which would normally consist of trusts or foundations, companies and funds. Once the family offi ce is set up, senior executives like both of you will run the show and I will work with you when legal help is needed for new projects. Can you describe your ongoing roles with the family offi ce? VINCENT As CFO, the basic duty is to make sure both the operational and fi nancial sides comply with the family constitutions and internal guidelines. Risk management is a less-known


WWW.STEPJOURNAL.ORG


part of my position, but is equally important. If the family portfolio holds listed securities, the CFO should be updated on the latest corporate actions so that he can assess the possible impacts on the portfolio. I am involved in other interesting projects such as converting a single-family offi ce to a multi-family offi ce and restructuring compensation packages for senior staff . DORIS There are two key aspects to my role in the front offi ce of a multi-family offi ce: to understand the risk appetite of the families and to generate good returns within the mandates. Many think family offi ces are there only for capital preservation, but, because of the operating fees, our activities are very much performance-driven. We constantly put together investment solutions and platforms.


PATRICIA Now can you tell us how family offi ces usually start in your experience? DORIS I think it is demand-driven. A typical path is when a career investment banker or private banker has developed a good relationship or track record with an existing family client; he leaves the bank to set up the family offi ce. History, connection and sometimes blood or marital relationships with the family are important. VINCENT I would agree with Doris. Quite often, it is started by a private banker who has known the family for a long time or is a relative of the family. When the family offi ce yields good returns, the family puts in more funding and slowly it starts to manage funds of other families while the original family remains the key client. PATRICIA Indeed, some single-family offi ces are started with multi-family offi ce potential in mind. If this is the case, I would embed scalability in the initial structure. When needed, the matrix of trusts, companies and funds can be expanded and reconfi gured. Executives’ remuneration and equity incentives will need to be adjusted and licensing requirements met.


APRIL 2013 43


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84