$4 Billion Hong Kong Family Office Invests in Cryptocurrency — What is the Scale of the Investment?

VMS Group, a multifamily office based in Hong Kong with strong ties to private equity, is embarking on its initial venture into digital assets as clearer regulations and institutional momentum draw traditional investors into the cryptocurrency sector.

According to a report from Bloomberg on Tuesday, the firm, which oversees nearly $4 billion for some of the wealthiest families in the city, intends to invest up to $10 million in Re7 Capital, a hedge fund located in London that specializes in decentralized finance strategies.

Elton Cheung, managing partner at VMS, stated that this decision signifies a transformation in the firm’s approach to liquidity and diversification.

Established two decades ago, the Hong Kong-based firm has traditionally concentrated on private equity and long-term investments across various sectors, including real estate, pharmaceuticals, and technology.

However, as companies remain private for extended periods and timing exits becomes increasingly challenging, the firm is now shifting towards more liquid strategies, which encompass digital assets.

VMS Opts for Hedged Strategy in Crypto Rather Than Direct Token Investments

Cheung remarked to Bloomberg, “We believed this was the appropriate moment due to rising demand and because we observe clearer legislative and governmental backing from various regions, along with substantial institutional support and endorsement.” He did not reveal specific client identities.

Rather than acquiring volatile tokens such as Bitcoin, VMS has opted to collaborate with Re7, which provides a market-neutral strategy.

The fund generates yield by supplying liquidity on decentralized exchanges and lending stablecoins, while employing hedging techniques to mitigate price fluctuations. This strategy aligns more closely with the risk management frameworks of traditional family offices that seek exposure without speculative risks.

Evgeny Gokhberg, founder of Re7, stated, “The reason investors continue to return to crypto is the asymmetry of risk and return. Generally, people perceive asymmetry in crypto as ‘lose everything or achieve a 100x return.’ That rarely suits a serious allocator concerned about their reputation.”

Founded in 2021, Re7 asserts that it has consistently achieved double-digit returns, although it did not provide specific figures.

Next-Gen Wealth Drives Hong Kong Family Office’s Shift Towards Broader Digital Asset Engagement

VMS’s cryptocurrency strategy extends beyond hedge fund investments. Zhi Li, who joined the firm in December to oversee digital asset investments from London, indicated that the team is exploring broader applications, including blockchain payments and infrastructure.

One area currently under consideration is the integration of crypto-based transactions at a real estate development that the firm manages in Vietnam.

Li noted, “There is significant institutional and family interest in obtaining regulated digital asset exposure. We have observed the younger generation of families desiring to pursue different avenues.”

As family offices adapt to accommodate new wealth dynamics and generational preferences, VMS’s foray into cryptocurrency signifies a wider trend. Once hesitant, traditional capital is now entering the digital asset space, not for speculative reasons, but for structured opportunities, yield, and strategic positioning.

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