Ronnie CHAN, Chairman of Hang Lung Group, says it’s best to give your money away rather than leave it to your children
Ronnie Chan Chi Chung is the Chairman of Hang Lung Group and its subsidiary Hang Lung Properties, one of the biggest real estate developers founded in Hong Kong. His family office was set up back in the 1960s when the concept of family offices was little-known in Asia.
As an early mover, Chan’s family office has experienced the boom-and-bust cycles in Hong Kong and witnessed most of Hang Lung’s 60 years of rich history. And throughout all this, the family office has remained focused on its key pillars – investment and philanthropy.
“Our family office continues to run smoothly, and we know what to invest in. When it comes to philanthropy, our focuses are also quite formed. We know what issues we want to address although they can change over time,” Chan says.
“In addition to investment and philanthropy, our family office also serves an administrative function. That’s all, for more than 50 years.”
Unlike some big families with complex issues at times, Chan’s relatively small family allows him and his brothers to make decisions quickly and to stay focused on well-defined long-term goals.
Families can be complicated
It is not uncommon to see the quintessential challenges of a big family. As a result, some family offices are set up to help families to pass on wealth, and to ensure peace and harmony.
However, Chan says this model is not applicable to him because he has no intention of leaving anything behind. His family office has never been charged with planning or distributing wealth to family members. That is a family tradition.
Chan has often voiced his views on inheritance advising people to give their money away. “When legacy is off the cards from day one, there are no expectations from family members and therefore no disappointments either,” he says.
Chan does practice what he preaches. Through the Morningside Foundation, the Chan family has donated enormous sums to different charitable causes including education, science, and music. While the Foundation made the record-setting US$350 million gift to Harvard University in 2014, it also supported The International Congress of Chinese Mathematicians (ICCM), and helped found the Morningside Medal of Mathematics to recognize exceptional mathematicians of Chinese descent under the age of 45. The Morningside Music Bridge (MMB) is another endeavor related to education. The MMB is a summer music exchange program which provides world-class training for exceptionally talented young musicians between 12-18 years old.
Almost half of the students come from China.
Chan’s commitment to education means that he has also supported many qualified students in different countries, and many universities, at home and overseas, including his alma mater - the University of Southern California (USC) - to which Chan and his wife, Barbara, made a US$20 million personal donation in 2014. The charity reaffirms Chan’s pledge to give away not only his family wealth, but his own money. He believes whoever makes the money understands its value best, and therefore gets to decide how and where the money is spent.
The outspoken business leader is also passionate about heritage conservation. Chan founded China Heritage Fund (CHF) in the mid-1990s to collaborate with the Palace Museum, Beijing. This move was pioneering on multiple fronts. The CHF is the Palace Museum’s first ever partner/supporter in its largest scale restoration work since the early 20th century. The inauguration project – the Reconstruction of the Jianfu Palace Garden - was approved directly by the State Council. Through CHF’s continuous efforts, Chan has been instrumental in supporting and promoting best practices in architectural restoration work in China. Chan believes that conservation engages the past with the present over the future, and he hopes to inspire others to do the same. His family office is closely involved in all partnerships with the Palace Museum.
Drive to succeed
Hang Lung was founded by Chan’s father in 1960, and the company rapidly gained prominence in the Hong Kong real estate market as the city’s economy took off. But the company experienced a lean period in the early 1980s. Chan took over as Chairman in 1991 and embarked on a new direction by venturing into the Mainland China market which resulted in Hang Lung’s prominent presence in many major Chinese cities today.
Chan says that he never expected a dime from his own father and that gave him the drive to succeed on his own. “I want the next generation to do what they like the most. They have the space to choose their own paths,” says Chan, a father of two sons.
Chan himself received his MBA from USC, and both his sons also graduated from the same institution. His younger son Adley has a doctorate degree in occupational therapy and is now a faculty member at USC, whereas his elder son Adriel is enthusiastic about business.
“Adriel got involved in the business because he wanted to, not because it was expected of him,” Chan says. “It’s pretty amazing that he has earned the respect of the staff all on his own.”
Despite his privileged upbringing, Adriel rose through the ranks of the corporate world on his own merits. From humble beginnings as an assistant manager at KPMG in Shanghai, he joined Hang Lung Group in 2010 and became an executive director in 2016.
Key to family ties
A growing number of high net worth individuals worldwide like Chan pledge to donate their fortune to charities, but most still choose to lay down a plan to manage intergenerational transfers of wealth.
“I’m not against giving money to one’s children because I believe in the necessity of ownership. If you don’t respect ownership, then society has a problem,” Chan says.
But to make a family happier and to keep things simpler, he reiterates his view: give your money away. “Dealing with family can be difficult. If no one can dip their hands in the pot, then there are no arguments,” he says.