Multi-family office co-founded by Lee Han Shih looking to sink funds into Web 3.0 and crypto

WHAMPOA Group, a private multi-family office set up by a member of the family of late businessman and philanthropist Lee Kong Chian, is setting its sights on digital-asset investing, with a view to managing third-party capital.

Whampoa is a partnership between Lee Han Shih, who is executive director of the Lee Foundation, and veteran lawyer Amy Lee, whose father Dennis Lee Kim Yew co-founded the Lee & Lee law firm.

The group has set up Whampoa Digital, which envisions 4 “verticals’’ or pillars in its multi strategy. These are:

• A public-markets fund to trade digital assets including crypto;
• A private-market fund investing via the venture or private equity route;
• Incubator services; and
• Research and advisory. 

The public-markets hedge fund has started trading using proprietary capital from families participating in Whampoa Group. The private-market fund will be closed-ended, and aims to invest in products and solutions that will drive and enable mass adoption of digital assets and Web 3.0.

Whampoa’s president is Justin Han, who has managed the Lee families’ investments and businesses in China since 2010.

Shawn Chan, Whampoa Group chief executive, said the private-market fund may invest in companies in the infrastructure space, including those in hardware and software, that are expected to eventually enable the next iteration of the Internet as it evolves towards Web 3.0. It will also look into demystifying and simplifying the process for users and to build their trust. These solutions include cybersecurity and CRM (customer relationship management) applications for the NFT (non-fungible token) communities.

Web 3.0 is defined as decentralised web. The transition towards that – the path remains unclear – may be Web 2.5.

Chan said: “Our founders have been investing in this (digital asset) space for some time, and we could have continued this way. But we’re at a point where this is an emerging asset class. We see huge opportunities, not just as an investment, but also for Singapore to play a very important, strategic part in the development of this asset class. It makes the most sense to start looking into this, and to start investing.”

Whampoa’s intention is not to simply provide passive capital, but to get a front-row seat in terms of driving development and expansion, particularly in emerging markets like South-east Asia. Deep-pocketed partners will help drive this ambition, as well as mitigate concentration risk for Whampoa’s principal families.

The Business Times understands that there is keen interest among some large Chinese companies. “In substance, our private-market fund will be a multi-strategy fund. But in essence, it’s a platform to engage with capital partners in strategic projects. Whether it’s an infrastructure or a solution to drive mass adoption, we can only do so much on our own.”

To manage the public-market digital-asset fund, the group has roped in Aureole Foong as a senior partner. Foong has had over 3 decades of experience as an investment professional in the hedge fund industry. The group aims to leverage his experience dealing with large institutions, in the hope of eventually attracting institutional capital.

He said: “Digital assets, including crypto, will be a huge investment opportunity in the long term. Too many people look at it in terms of what’s going to happen to Bitcoin prices. But the game changer has happened in the last year and a half. Many big US institutions, pension funds and foundations are slowly and quietly investing in this asset class. More importantly, over the long term, (digital assets) will be a good diversifier.” BlackRock recently set up a private Bitcoin trust in response to demand from large institutions, despite Bitcoin’s price plunge.

Whampoa’s fund began investing around May this year, using proprietary capital. It employs a market-neutral strategy, trading options with crypto such as Bitcoin and Ethereum as the underlying assets. Since it began, Foong says, returns have been in the black despite severe price drops among crypto coins. A market-neutral strategy refrains from taking directional bets.

This year has proved a difficult year for crypto. The implosion of so-called stablecoin TerraUSD sparked a downward spiral, exacerbated by the failure of funds such as Three Arrows. Bloomberg has reported that MVIS CryptoCompare Digital Assets 100 Index is down by about 60 per cent this year. Bitcoin has plummeted from its peak last November of almost US$69,000.

“Despite the volatility in the markets, we want to generate a steady rate of return, and to preserve capital as much as possible.” With an options strategy, the elevated volatility may provide a silver lining as it enables the firm to benefit with a higher premium.