New | Business successions that go awry are the stuff of soap operas and tabloids

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In the next 20 years, as many as 500 wealthy families with US$2.1 trillion of assets – equal to India’s GDP – will face the challenge of succession planning, according to UBS’ forecast

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In Asia, succession planning is a relatively new concept, with most of the region’s wealth having been created in the past decade. Photo: Felix Wong

Christy Choi

Published: 9:45am, 13 May 2017Updated: 7:19pm, 21 Jul 2017

Business successions: when they go bad, they are the stuff of soap operas and tabloids.

The strife between the heirs of the famous roast goose restaurant Yung Kee and the case of Nina Wang, wife of the still-missing tycoon Teddy Wang, and the fung shui master who looked to inherit the Chinachem fortune were the talk of the town in Hong Kong.

“Every business founder exits the business at one point, whether by design or default,” said Bernard Rennell, global head of family governance and family enterprise succession for HSBC Private Banking. “Better it be by design.”

His was a statement echoed by many a wealth management professional and a call to action that families around Asia were paying attention to after years of inertia, said Eric Landolt, head of family advisory for Asia-Pacific at UBS, who has seen a significant number of families seriously take on the challenge in the past five years.

“In the next 20 years, we expect a US$2.1 trillion shift in assets as around 500 families face the challenge of succession ... This is massive. It’s the current [gross domestic product] of India,” he said, citing a 2016 UBS report with 20 years of data tracking 1,400 billionaires, accounting for 80 per cent of global billionaire wealth.

In Asia-Pacific, 85 per cent of those billionaires who would soon face that generational shift would be first-generation, Landolt said.