Wealthy Chinese families are investing heavily in private market artificial intelligence (AI) opportunities while seeking diversification with gold and cryptocurrencies amid volatile markets, leading wealth advisors said at Asian Private Banker‘s inaugural China Global Wealth Summit (CGWS).

“The wide use of AI will lead to changes in every industry. In this process, a lot of investment opportunities will arise in the venture capital and private equity sector,” Zander Yin, co-founder and CEO at Chinese independent wealth manager Noah, said during a panel discussion.

Yin added that Noah also recommends investing in the underlying infrastructures supporting the development of AI. He advises clients to build a ‘pyramid model’ for their investments to ensure sound wealth transfer, comprising a lower layer of allocations to low-risk and stable assets, and a top layer to growth opportunities, he explained.

Zander Yin, Noah

Being among the first wealth managers to introduce private market opportunities to onshore investors, Noah helped clients capitalise on the boom of China internet companies through a VC fund offered by its asset management arm, according to Yin.

Chinese investors began to focus on global assets after the Covid-19 pandemic, but allocations to alternative investments remain relatively low, in part due to information asymmetry, Yin said. However, he believes the rise of semi-liquid and multi-strategy funds will boost clients’ interest in this sector.

Changing mindsets

The AI theme also resonates with wealthy Chinese family offices considering long-term investments, as trillions of dollars are expected to be transferred to the next generation over the next few decades. In one example, Cachet Group, a Hong Kong-based multi-family office, recently said it had made a strategic investment in OpenAI in April this year as part of its ongoing mission to support transformative AI technologies.

Christophe Lee, managing director at Sun Hung Kai Capital Partners, said during a panel discussion that there has been an evident shift in the investment mindsets of family offices. “We observe that the second gen may have different views compared to the first gen. They usually have more keen interest in high technology. They will be very excited talking about AI technologies,” said Lee, who leads alternative asset management and family office solutions services at the firm.

Christophe Lee, Sun Hung Kai Capital Partners

“They are more sensitive to asset allocations and risk diversification. Some of the second gens do not participate in the family business. They will focus more on preserving the wealth of the family,” he added.

Lee said that there are various types of family offices, and some seek high-risk and high-return investments. In some extreme cases, AI investments make up for more than 50% of their portfolios, but Lee advised that investors need to be aware of vintage risk and could access AI opportunities through fund of funds (FOF) in the beginning.

AI opportunities in the US

While President Trump’s trade policies have resulted in ongoing market uncertainties, Lily Chan, head of the Asia Alternative Capital Markets Group at Goldman Sachs, stated that the US is the largest private equity market and that the bank remains confident in the US economy in the long run, despite short-term volatility.

Lily Chan, Goldman Sachs

“We see many investment opportunities in AI in the US,” Chan said during a panel discussion. Citing research by the Wall Street lender, she added that many of the top AI companies have yet to go public over the past decade, but their annual growth rate could range from 50% to 70%.

“Many people asked if now is a good time to invest in tech and growth strategies. Our view is that if you find a good AI company, it would be more attractive than investing in publicly listed tech companies,” she said.

Noah’s Yin added, “You cannot eliminate the US market because AI industries in the country still offer long-term opportunities.” Similarly, Lee said his firm has been exploring opportunities in the US given the depth of its capital markets and the broad coverage of industries.

De-dollarisation

Although optimism for AI opportunities in the US market is abundant, wealthy Chinese investors are also demanding more diversification amid rising geopolitical tensions and volatile markets.

Long-term strategies and de-dollarisation have been popular topics among family offices in recent months, according to Sun Hung Kai Capital Partners’ Lee. “De-dollarisation doesn’t happen tomorrow, but if the trend continues, ‘how do we preserve the value of our assets?’ becomes something we need to think about,” he said.

Lee said there are two alternative strategies: gold and cryptocurrencies. Although people would previously shy away from Bitcoin, more individuals are now accepting it as a hedging tool, he observed.

Noah’s Yin agreed that cryptocurrencies have recently emerged as a topic of conversation with clients. “In an uncertain world, it is our job to remove the information barriers for clients to drive decent long-term wealth management performance,” he said.

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