Sterling Private Management Limited is a Hong Kong-based family office that manages the assets for members of the Chen family, a prominent Hong Kong family business that was a co-founder of Hang Lung, a publicly listed property company, among other business interests. For most of the past decade, Sterling pursued what was essentially an endowment model approach to managing the family’s assets. The goal was wealth preservation with growth, which was interpreted as a global balanced portfolio strategy. But in September 2008, the Sterling directors, with the advice of Grace Financial, which manages the family office's investment operations, decided that a different approach needed to be taken, both in terms of dealing with the crisis on a short-term basis and determining its asset allocation over the longer term.

“In September 2008, we had a very strong sense that the economic crisis was not going to be like previous crashes, not just another boom-and-bust cycle,” says Roy Chen, who has been a director of Sterling since its inception in 1993. Central to the change in mindset was a view that, when the global economy does recover, it will do so in a shape and form that few would recognise today. In order to align itself with this new model, Mr Chen says that

Sterling will shift its focus from the traditional US and European markets to look primarily at opportunities in Asia.

“We believe we are in the middle of a fundamental change in the balance of power,” he explains. “The centre of economic, financial and political power is shifting to Asia and US economic dominance will soon be a thing of the past. Asia today is no longer the volatile, cyclical, boom-and-bust economic environment that it was 15 to 20 years ago.”

Mr Chen says that Sterling is already exploring investment opportunities. “There is no doubt that things are cheap and valuations are compelling,” he says. “The problem is that not everything will come back up. We are looking at a handful of areas of opportunity, which will also allow us to protect our downside.” With a longstanding presence in property, Mr Chen says that Sterling is particularly interested in real estate, but is likely to be highly selective. He also believes that the credit markets look interesting, and that there could be opportunities in commodities, but that timing will be very important.

The key point, according to Mr Chen, is that this approach will help Sterling to weather the downturn and emerge as a stronger proposition. Although, like many family offices, Sterling endured losses in 2008,

Mr Chen hopes that the office will be well positioned to take advantage of an upturn in the economy - whatever form this ultimately takes.