Steep learning curve for Hong Kong millennials who expect their family wealth to do more than just make money

Hong Kong’s rich millennials are making inroads as they push for their family fortunes to be invested in ways that generate not only returns, but also a positive social and environmental impact.

A difference in opinion, however, with the previous generation about wealth preservation and an inadequate local supply of investment products as well as advisers mean for many it can only be a step-by-step transition – a journey with a steep learning curve.

“We expect our money to do more than just make more money. We expect our money to actually make a difference,” said Michael Au, the managing director of District Capital, which invests in start-ups as well as funds with a sustainability mandate. A third-generation family wealth owner and manager, he set the firm up two years ago.

“Wealth has been professionally managed for much longer in the West than in Asia … some of our [older] family members are still business operators. We have to shift their bottom line focused mindset to a more holistic approach – while we need to preserve wealth, we need to preserve the world as well,” he said in an interview.

District Capital is a “single-digit percentage” carve-out from the assets of a 15-year-old family office. Family offices are private firms managing the wealth and affairs of a rich family. Au’s family has accumulated its wealth mainly from real-estate development. And as more millennials in the family – some with backgrounds in finance and health care – became stakeholders in the family office, they wanted a say in how its wealth was managed.

But the plunge into sustainability and impact invest was not a straightforward journey for Au.