Johnny Hon Talks Unique Investment Opportunities For Today's Market
Uncertainty is running high in 2019, with the simmering US-China trade war and Brexit both weighing heavily on financial markets. There are bound to be more fluctuations and unexpected events as the year progresses, which means wealthy investors need to think tactically.
“You don’t have to be in the market all the time,” says Johnny Hon, the founder and executive chairman of the Global Group, an incubator, accelerator and evolving venture capital company. “When there’s a lot of uncertainty and the market has the potential to swing wildly, it’s better to have a lot of cash on the sidelines and look for opportunities. There are always opportunities.”
In Hon’s native Hong Kong, for example, investors have less appetite for opportunistic investments when property prices are consistently rising, but in today’s environment they are increasingly asking him about new asset classes and markets where they can put their money to work.
Hon has plenty of ideas for them. From fintech in Israel to horse racing in the UK, Ireland and Qatar, and real estate in Turkey, the Global Group lives up to its name.
“This sort of market is good for us,” says Hon, whose team includes specialists in fintech, biotech, entertainment and lifestyle investments such as wine and contemporary art. “People who want to diversify their investments away from local real estate and financial markets are hungry for opportunities that aren’t correlated to the market, and that’s where we specialise.”
One of the new fields the company has backed recently is personalised medicine, which leverages a patient’s individual genetic make-up to deliver highly tailored interventions. Instead of seeking treatment when illness strikes, this kind of precision medicine envisions a future in which medicine is focused on maintaining a high level of well-being and preventing illness.
Live entertainment is another area that Hon expects to grow. “We’ve always liked live entertainment and what we’re seeing now is a move towards performances that involve the audience as part of the show,” says Hon. “We’ve seen shows like this in New York and there’s even been one in Hong Kong, so we’re exploring this kind of interactive experience and expect that it will grow.”
Because of our expertise in other countries, we can bring ideas to our client that will help them to diversify their interests
The Global Group’s clients are from all around the world, including the UK, US, the Middle East and Central Asia, but especially Hong Kong and southern Mainland China, where new millionaires are being constantly created. The growth of this millionaire class presents an investment case of its own—and it is one that Hon’s team understands first-hand. As the Chinese get wealthier, for example, so the prices of Bordeaux wine futures increase. And so it is with many lifestyle assets.
While investing in wine and art is certainly more fun than trading in securities, there is an underlying rationale that is based on Asia’s growing wealth and the low correlation of such assets to traditional financial markets.
Hon also continues to invest in bloodstock in anticipation of Mainland China taking a more positive attitude towards horse racing in the future, which could send prices for his racehorses and breeding stock sky-rocketing.
The Global Group is a bridge between East and West, and scours the world in search of growth opportunities, sometimes in the firm’s core specialities but also in more conventional assets such as mining, where valuations have fallen and there is good potential for returns.
“One of our advantages is that we do business globally, whereas traditionally a lot of investors are heavily invested solely in domestic assets,” says Hon. “Because of our expertise in other countries, we can bring ideas to our clients that will help them to diversify their interests.”
Hon and his team see opportunities across South America and the Middle East. Mainland China’s growing economic presence around the world has also helped to bring new markets into play. The Belt and Road Initiative, in particular, is raising Mainland China’s international economic profile considerably, not least through the countries of Central Asia and the Caucasus, through to Turkey.
Indeed, Turkish real estate is one area the company has been looking at recently. The country was a magnet for investors in the early 2000s and was often talked about alongside the BRICS nations (Brazil, Russia, India, Mainland China and South Africa), but the economy has weakened in recent years, culminating in a currency crisis and soaring inflation in 2018. Amid the turmoil, some investors now see the potential to pick up assets at attractive prices.
The Global Group is even exploring potential deals in the Turkish entertainment industry, such as shooting a Chinese movie set in the country, thanks to attractive government subsidies for movies that are filmed there. “We are looking at a script that is basically a love story between Chinese people living in Turkey,” says Hon.
Happy endings are not just for the movies. While Hon and his clients are serious about making a good return on their investments, they are also serious about paying it forward.
“If you talk to high-net-worth clients about philanthropy, they don’t just want to donate money,” says Hon. “They want to actually get involved themselves and use their skills as entrepreneurs, especially the younger generation. They want to do something meaningful.”
The Global Group helps to connect clients to charities and other philanthropic projects where they can bring their dynamism and energy to bear.
“There are a lot of projects where entrepreneurs can explore the best way to do things and then, when it works, the government money can go in to support it,” says Hon. “Government is normally not as innovative or as fast as entrepreneurs.”
Few people understand that there is a world of opportunities out there better than entrepreneurs—or what it can mean to provide such an opportunity to somebody in need. Hon and the Global Group certainly understand that not all investment returns are measured on a balance sheet. Some investments are for fun, some are for doing good and some are for securing the future.
Discover more at global.hk
- Photography Jensen Hoi
- Styling Nina Ricardo
- Make-Up Nicole Lau @Wendy's Workshop
- Location Gough's On Gough