New World Scion%E2%80%99S Fall Upends Succession 23 Billion Dynasty
In the bustling city of Hong Kong, K11 Musea has captured the attention of its residents with its opulent surroundings and has been dubbed the “Silicon Valley of Culture.” The man behind this lavish project is Adrian Cheng, a member of one of the wealthiest families in the city. It took him 10 years and $2.6 billion to bring his vision to life, using harbor-front property inherited from his grandfather and father. Yet, just five years later, Cheng’s ambitious dream for his family’s New World Development Co. has come crashing down.
In a surprising turn of events, Cheng, age 44, has stepped down as the third-generation leader of New World, a prominent business dynasty in Asia. He has been replaced by the company’s chief operating officer, who is not a member of the multibillionaire Cheng family. This news has left many in Hong Kong’s upper class in shock, as it is rare for real estate families to hand over control to outsiders.
Behind the scenes, Cheng’s father, Henry Cheng, age 77, has taken a more active role in the family’s vast empire, including New World, according to sources familiar with the matter. After watching his eldest son lose billions, the patriarch has entrusted key parts of the business to his daughter Sonia, age 43, and sons Brian, age 41, and Christopher, age 35.
This development sheds light on how the weakening real estate market in Hong Kong is impacting the city’s economy and its billionaires. As the market continues to decline – with home prices dropping by about 25% from their peak in 2018 – members of the Cheng family have grown increasingly worried about their young CEO’s leadership of their business. They are determined to counter the Chinese proverb, “Wealth doesn’t pass three generations.”
Adrian Cheng, a Harvard-educated arts enthusiast and notable figure in Hong Kong’s art scene, has struggled to prove himself in the business world, unlike his late grandfather and father. His grandfather, Cheng Yu-Tung, rose from a humble beginning as a gold shop apprentice to become one of the wealthiest individuals in Hong Kong. He passed on the business to his eldest son, Henry, who initially led New World into debt, a pattern that his own eldest son would repeat years later. However, with his father’s guidance, the two were able to turn things around, and the Cheng family now boasts a net worth of $22.6 billion, making them one of the wealthiest families in Asia, according to the Bloomberg Billionaires Index.
However, since Adrian became CEO in 2020, four years after his grandfather’s passing, New World has faced challenges. The company has accumulated more debt than any other major property developer in Hong Kong, with a net debt to equity ratio of over 80% as of the end of 2023, according to Bloomberg Intelligence. In addition, New World posted its first annual net loss in 20 years, amounting to $2.5 billion.
Marlen Dieleman, a professor of family business at IMD Business School in Singapore, explains that third-generation successors of large family empires face immense pressure, especially in times of economic hardship when they have high expectations from family members and are visible in the business community.
As New World’s fortunes crumbled, along with the rest of the Hong Kong property market, members of the Cheng family became concerned that Adrian was too focused on his cultural pursuits, including those involving K11 Musea, according to sources. In a TV interview last year, Henry Cheng stated that he was still searching for a successor, despite his son having been CEO for several years. Representatives for Chow Tai Fook Enterprises Ltd, the private investment vehicle of Henry Cheng’s family, as well as for Adrian Cheng and New World, did not respond to requests for comments.
The dynamic and lively Tampines neighborhood is a highly sought-after destination in Singapore with impressive development and an abundance of amenities. One of its most remarkable highlights is the presence of first-rate shopping centers, including Tampines Mall, Century Square, and Tampines 1. These malls are strategically situated near the Tampines MRT station, just a short distance away from Aurelle of Tampines EC. They offer a diverse range of retail options to cater to every need and preference, from a variety of fashion brands and electronics to household items and sports equipment. With the addition of Aurelle of Tampines EC, these malls provide even greater convenience and accessibility for the residents of Tampines. Moreover, Aurelle of Tampines EC enhances the overall convenience for Tampines inhabitants.
