These HNW and UHNW individuals aren’t just the first generations of their family to have significant wealth, they are also the first in their family to have become an entrepreneur.
Mainland China has one of the largest proportions of first-generation U/HNW entrepreneurs in Asia (68%) and, based on our recent survey, the 2023 Global Entrepreneurial Wealth Report*, one of the highest proportions across all the world’s major markets. This leaves a smaller group (32%) who do come from a family business background.
Their businesses are a significant part of their wealth and therefore play a central role in their legacy plans. However, with so many first-generation entrepreneurs, there is likely to be less experience and knowledge of how to transition those businesses as part of the family legacy.
Wealth & business transitions
It’s also clear that mainland China’s wealthy entrepreneurs have already started passing on their wealth with 50% having done this either informally or through formal transfers. This is one of the highest proportions we see globally.
When it comes to their business transitions, just under a third of entrepreneurs in mainland China are thinking of exiting their business within the next 5 years either through succession or selling-up.
So, these transitions have already begun, and the relative success of these legacies are starting to be determined. So how well prepared are families?
The positive news is that 94% of mainland China’s wealthy entrepreneurs have indicated that they have some level of plan when it comes to transferring their wealth with only 6% saying that they haven’t yet made any plans as yet.
Concerns for the next generation
Educating them in the business early on is a clear priority for these entrepreneurs. We often see structures in mainland China which are somewhat unique – with greater emphasis placed on ensuring the next generation have senior management positions or board seats well ahead of the transfer.
*We surveyed 973 entrepreneurs across 9 markets with investible assets of USD2-100m+ to understand their priorities, concerns and plans in three key areas: international opportunities, the path to business exit and beyond, and the transfer of wealth through generations. This includes 127 respondents from mainland China.
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