Succession planning: Asian family fees
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BANKING

Succession planning: Asian family fees

When it comes to succession planning, there are fantastic successes and spectacular failures. But get it right and the rewards for private – and investment – banks can make it all worthwhile.

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by Sara Webb

Succession planning for Asia’s geriatric tycoons has become a hot topic. The restructurings or reorganizations of family businesses, particularly as elderly patriarchs or matriarchs prepare to hand over to the next generation, present a potential fee bonanza for squadrons of bankers, lawyers and other advisers, thanks to M&A, IPOs and divestments.

Family-owned empires have led Asia’s economic development, accumulating a staggering amount of wealth in the process. South Korea’s chaebol, or family-led conglomerates, steered the creation of the country’s important manufacturing sector, while the Chinese diaspora, fleeing famine or political turmoil in mainland China, built up large trading, commodity, manufacturing, property and banking businesses in Taiwan, Hong Kong and across southeast Asia.

But how do billionaires like Li Ka-shing – ranked the richest man in Hong Kong with a fortune of $33.5 billion – prepare to hand over their vast wealth to the next generation? Li, now 87, has won plaudits for the way he is managing the transition at his property-to-ports empire, thanks to a clear succession plan and a massive overhaul of his Cheung Kong and Hutchison Whampoa assets. But that’s in stark contrast to the soap operas being played out at some of South Korea’s chaebol; chocolates-to-hotels conglomerate Lotte and the Samsung group have hit the headlines thanks to their botched or bungled efforts to hand on the crown jewels.

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