Retiring Hong Kong business tycoon Li Ka-shing offers a model of shrewd succession planning within a family business.

A consummate deal-maker, Li Ka-shing made his fortune acquiring and selling a variety of assets, often breaking new ground in the process. After his retirement, his eldest son Victor Li will inherit his two main businesses, valued at $79 billion combined. These include CK Hutchison, a sprawling global conglomerate best known for its five core businesses: ports, retail, infrastructure, energy and telecommunications. The second is CK Asset Holdings, one of Hong Kong’s top property developers.

Victor Li is keen to assure investors that, despite the coming leadership transition, they can expect business as usual. After all, leadership succession can be complicated, particularly within family-owned businesses. According to Joseph Fan of the Chinese University of Hong Kong, family-run firms in Hong Kong, Singapore and Taiwan lose an average of 60% of their value in the years before and after succession. Li Ka-shing seems to be avoiding the common pitfalls, however. For one, he started succession planning as early as 2000. This was when his second son, Richard, stepped down as deputy chairman of Hutchison Whampoa (now CK Hutchison), making Victor the clear successor.

Oliver Rui of the China Europe International Business School in Shanghai points out that Li also took steps to smooth the eventual leadership transition by simplifying a complex holding structure. This entailed splitting property holdings from other assets, boosting both firms’ valuations, and making it easier for his son to sell off pieces of the empire down the road. Li has also sold billions in property holdings and reinvested in stable, cash-generating assets in Europe. These now account for nearly two-thirds of CK Hutchison’s operating profit.

Li’s long view is unusual, as many family businesses follow a flawed succession plan, or lack one altogether. But from the outset, Li has taken atypical approaches to building and running his businesses. He got into plastics in 1950, as one of the first in the British colony to do so. In 1971, he started his first property company, taking advantage of a price slump. He later moved into container ports, and was among the first outsiders to invest in China. In Hong Kong he diversified into retail and utilities. In 1979 Li became the first Chinese to take control of a British firm when he bought Hutchison, a trading house, which he used to expand abroad.

Li’s approach to leadership talent has also broken with tradition. The Economist notes that “he sought out professional managers, many of them foreign,” which is uncharacteristic for the head of a family business. His son Victor has worked with some of these managers for decades, and with them, has expanded CK Hutchison into overseas utilities. His overall vision may not become apparent for several years, especially since the senior Li plans to stay on in an advisory role. This seems to be assuaging investor concerns over the transition of power, but in the longer term, new ideas could be best for the future of the empire that Li built.

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