Hong Kong wealth management firm makes first crypto investment

VMS Group, a multifamily office managing nearly US$4 billion in assets, has announced plans to invest in cryptocurrency strategies.

The firm intends to allocate up to US$10 million to the decentralized finance hedge fund Re7 Capital, according to managing partner Elton Cheung.

This marks a shift from VMS’s traditional focus on private equity due to growing illiquidity in such investments.

Founded two decades ago, VMS manages funds across sectors, including internet technology and pharmaceuticals.

Rather than investing directly in cryptocurrencies like bitcoin, VMS has chosen to partner with Re7 Capital to reduce volatility.

Re7 uses a market-neutral strategy, lending stablecoins and hedging risks, and has reported steady double-digit returns since 2021.

VMS is also exploring digital payment and crypto infrastructure projects, including in its Vietnam real estate venture.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Hong Kong’s strategic position in the global crypto regulatory landscape

VMS Group’s crypto move comes as Hong Kong is deliberately positioning itself as a leading cryptocurrency jurisdiction with a principles-based regulatory approach that contrasts with the more fragmented frameworks in the US and EU 1.

This regulatory clarity provides a compelling environment for family offices, with Hong Kong distinguishing between security tokens and utility tokens while developing specific frameworks for different crypto assets 1.

The region offers significant tax advantages, including no capital gains tax on cryptocurrency trading, creating additional incentives for wealthy investors seeking regulated exposure 1.

Hong Kong’s common law system provides legal predictability that family offices value, with the Securities & Futures Commission (SFC) and Hong Kong Monetary Authority (HKMA) actively issuing clarifications rather than maintaining regulatory ambiguity 2.

This supportive regulatory environment directly addresses VMS’s stated reason for entering crypto now: “clearer legislative and government support from various jurisdictions.”