VMS Group, a Hong Kong family office stewarding nearly $4 billion for some of the territory’s most prominent dynasties, has decided that two decades of conservative private equity investments might benefit from a dash of digital asset seasoning.
The firm’s inaugural crypto foray involves allocating up to $10 million to Re7 Capital, a decentralized finance hedge fund that has presumably mastered the art of generating double-digit yields since 2021 without the inconvenience of disclosing exact figures. This strategic pivot reflects VMS’s growing unease with private equity’s increasing illiquidity—a peculiar irony considering that patient capital was once the hallmark of sophisticated wealth management.
Rather than purchasing Bitcoin directly (and subjecting themselves to the cryptocurrency’s theatrical price swings), VMS has opted for the more palatable route of investing in crypto strategies. This approach allows the family office to dabble in digital assets while maintaining the pretense of risk management that wealthy families apparently require before embracing revolutionary technology.
VMS sidesteps Bitcoin’s volatility theatrics by investing in crypto strategies—a sophisticated detour around direct digital asset ownership.
The timing coincides with Hong Kong’s increasingly accommodating regulatory framework for digital assets, creating what VMS perceives as an opportune moment to explore liquid alternatives to their traditionally illiquid holdings. The firm’s clientele—spanning property magnates and conglomerate owners—are reportedly experiencing multi-generational pressure as younger family members advocate for digital asset exposure. Bitcoin’s impressive 50% rally since November’s election has undoubtedly strengthened the younger generation’s argument for crypto inclusion. The current market recovery has seen Bitcoin climbing above $105,000, validating those early advocates who pushed for digital asset adoption.
VMS’s exploration extends beyond mere investment allocation into operational applications. The firm is investigating crypto payment integration for real estate projects, including a Vietnam property venture where they maintain majority ownership. This practical approach suggests VMS recognizes that digital assets might serve purposes beyond portfolio diversification—though whether crypto payments will revolutionize Vietnamese real estate transactions remains an open question. Understanding various investment strategies and tools for managing crypto assets becomes crucial as traditional wealth managers navigate this evolving landscape.
To oversee these digital initiatives, VMS recruited Zhi Li in late 2023, tasking him with leading infrastructure investment strategies from London. The firm has also partnered with a former SenseTime executive for early-stage AI investments, suggesting VMS’s technological appetite extends beyond cryptocurrency into broader innovation sectors.
This calculated entry into digital assets represents a broader shift among Hong Kong’s elite family offices, who are discovering that traditional wealth preservation strategies might require unconventional adaptation in an increasingly digital financial landscape.
