Steeped in Henderson mould, Peter Lee focuses on markets close to home

Being a scion of one of Hong Kong's richest families must seem like a dream to most - fame, fortune and a privileged lifestyle are guaranteed. But stepping into the shoes of one of the SAR's most successful entrepreneurs is no breeze, take it from Peter Lee Ka-kit, eldest son of Henderson Land group patriarch Lee Shau-kee. There are the demands and multi-tiered responsibilities his status imposes. Mr Lee, 37, has been vice-chairman of group flagship Henderson Land Development since 1993, and is chairman of Henderson China Holdings and executive director and vice-chairman of Henderson Investment. He is also a member of the National Committee of the Chinese People's Political Consultative Conference. Then there are the constant and inevitable comparisons with the offspring of Hong Kong's other business dynasties. Mr Lee insists his focus is on competing with some of the world's biggest corporations - not trying to outdo other prominent Hong Kong families and their respective conglomerates. Hong Kong's goldfish-bowl media see it differently. 'Some local media are fond of comparing the performance of companies run by the children of Hong Kong's richest families. I'm not bothered by this at all because they are my friends. We don't harbour ill feelings towards each other whenever we get together,' Mr Lee said. 'We make money in different ways and we have our own lives. My life would be so much easier if I had to compete only with Hong Kong's other prominent families, not with some of the world's biggest companies.' Henderson, capitalised at more than US$20 billion, is one of Asia's wealthiest business groups, featuring consistently in Fortune magazine's annual ranking of the world's wealthiest and strongest companies. Its core businesses are real estate investment and development in Hong Kong and the mainland, and utilities. Recently it diversified into information technology. The Lee family owns seven listed companies in Hong Kong. Henderson Land Development has had a dual listing in Hong Kong and in Tokyo since 1997. The 1999 edition of Forbes magazines listed Lee Shau-kee as Asia's richest man, although an Australian newspaper last year said the family had slipped to 10th place behind Li Ka-shing of Cheung Kong (Holdings) and Sun Hung Kai Properties' Kwok brothers. Peter Lee's office, atop Worldwide House in Central, combines East and West, with traditional Chinese rosewood furniture combined with contemporary designs. Pictures of Buddha hang on one side of his office and a full set of tea equipment is placed at the corner of his table. A step machine lies behind a ping feng screen. 'The design of my office is my own idea. It makes me feel comfortable and relaxed even if I'm working late at night. I haven't used the step machine for sometime though,' he said. With primary responsibility for Henderson's investments in the mainland, Mr Lee has had a markedly lower profile than some of Hong Kong's younger-generation tycoons. Yet he has not been able to escape comparisons with the high-flying sons of Li Ka-shing. Victor Li Tzar-kuoi, 36, is deputy chairman of Cheung Kong (Holdings) which made a net profit of HK$59.37 billion in 1999. Its associate, Hutchison Whampoa, made a record-breaking HK$117.34 billion during the same period, underscoring its status as Hong Kong's most versatile and internationally acclaimed conglomerate. Meanwhile, Victor's younger brother, Richard Li Tzar-kai, 34, last year shot on to the world stage when his flagship Pacific Century CyberWorks beat Singapore Telecommunications for control of Hong Kong's largest fixed-line operator, Cable & Wireless HKT. Peter Lee says the Henderson and Cheung Kong groups are akin to apples and oranges. About 90 per cent of Cheung Kong's profit came from overseas investments, he said. (Hutchison's record earnings were bolstered by a HK$118 billion one-off gain from the sale of its stake in Orange, its Britain-based mobile-phone operator. Cheung Kong received a HK$57 billion share from that transaction.) By contrast, Henderson's activities are focused on Hong Kong and the mainland, with less than 3 per cent of the group or family's private investment outside these markets. Last year, Henderson Land earned net income of HK$5.8 billion while its China unit earned HK$146 million. 'In a sense, you can perhaps describe me as a patriotic businessman.' It has long been a tradition among Chinese families for the eldest son to step in his father's shoes. Against this backdrop, some analysts have questioned why Mr Lee has spent 16 years (since 1985) nurturing Henderson China's business across the border rather than focusing his energies on the group's Hong Kong flagship. 'It was my father's decision for me to start my involvement in the family business by looking after our China unit. He wanted me to gain experience by building the group's business in China.' He was handed a tough task. Henderson China charged into the mainland property market following late paramount leader Deng Xiaoping's landmark southern tour in 1992, which sparked market reforms. Soon after, however, a combination of over-supply and the imposition of a capital gains tax by Chinese authorities sent the property market into a prolonged downturn. Mr Lee conceded Henderson China had been born at the wrong time, but added: 'The worst period is over and we are now seeing the light at the end of the tunnel.' He has no regrets. 'Being a pioneer is always a very tough job. But it certainly provided me with good training because doing business in China is much more difficult compared to Hong Kong. If I were a father, I would do the same. ' And Peter Lee has never thought of setting up his own business. 'Henderson China is expanding into e-commerce which is a new business for the group. This gives me a lot of satisfaction.' Away from the corporate world, Mr Lee spends his time on arts and spiritual pursuits. For more than 10 years Mr Lee has been practising the Buddhist art of meditation, and recently he took up Chinese calligraphy. 'Meditation provides me with inspiration and new ideas, things that I hardly find in the course of my daily grind,' he said. His keen interest in Chinese arts and culture explains in part the group's preference for cross-border rather than overseas expansion. 'I feel uncomfortable entertaining or 'shoe-shining' politicians, a practice which you need to do from time to time if you are doing business overseas.' A bout of discrimination during his student days overseas remains etched on his mind and perhaps reinforces his focus on the domestic market. 'During my studies in Britain, I felt terrible being treated as a second or even third-class citizen.' While the line of succession in Henderson is clear, Mr Lee does not see himself taking the helm anytime soon. Asked about his 72-year-old father stepping down, he responded: 'I will be the first one to ask him not to do so. There is no such thing as retirement among the Chinese. It will be a pity, if and when he retires, because his thoughts and ideas are among the group's most valuable assets.' Peter Lee is constantly expanding his knowledge of the technology sector, premised on the belief that the Internet revolution will make indelible changes in the corporate arena. He believes Hong Kong people are gradually losing their competitive edge relative to foreigners and mainland Chinese, who are keeping track and getting abreast of the advances in the Internet. Hong Kong had become used to an easy life of earning money quickly from speculating in the stock and property markets, but the good times were gone, he said. 'I totally disagree with some people who have said that Hong Kong will enhance its competitiveness as long as property prices come down further. Hong Kong should strengthen itself by producing more professionals and experts instead of waiting for property prices to come down.' He believes China's impending accession to the World Trade Organisation will bring a host of benefits. It is estimated that only 1 per cent of the world's products enter China today because of trade restrictions. When China lowers its import tariffs and deregulates markets, it will likely attract an enormous rush of the world's manufacturers and suppliers. Mr Lee said he would transform Henderson China into one of the leading companies on the mainland that would benefit from the opening up of its markets. Changes were inevitable and necessary in the face of stiff competition from top-notch multi-national corporations. Competing with them would be tough because of their ability to raise huge amounts from the global equity markets and 'lean but mean' managements, which could make them very aggressive. 'I can imagine battling with top companies from different parts of the world after China accedes to the WTO,' he said, likening the forthcoming duel to the battle between Chinese nationalist forces and the Baguo Lanjun, an alliance of eight of the world's most powerful nations which occupied China during the Qing dynasty. 'My father has been encouraging the group's senior executives during our monthly meetings to bring in more young, energetic and professional executives who can provide fresh ideas and innovation to improve and strengthen group performance. 'If you want to win a major battle, you've got to arm and prepare yourself for it.' Biography Peter Lee Ka-kit, 37, National Committee member of Political Consultative Conference, has been executive director of Henderson Land Development since 1985 and vice-chairman since 1993. He has been an executive director and vice-chairman of Henderson Investment since 1993 and is chairman of Henderson China Holdings. Educated in Britain, he has, since 1985, primarily been responsible for the development of the Henderson Land group's mainland business.