New York becomes one Chinese billionaire family's haven from property crash - The Straits Times

Right moves

What saved their personal fortune was the decision to list Soho on the Hong Kong stock exchange in 2007 rather than in China, said four sources familiar with the matter. Goldman Sachs, whom Ms Zhang worked for in London after earning a master’s degree in development economics at the University of Cambridge, handled the listing.

Unlike with mainland China, where residents are given a strict annual overseas capital quota, money can move freely out of Hong Kong and be used to purchase assets abroad. The bulk of the payments made by Soho funded US real estate deals, the sources said. Most of the disbursements were between 2015 and 2017, including special dividends and return on capital.

The assets, staff and reporting requirements of Ms Zhang and Mr Pan’s family office are entirely in the United States, according to a source familiar with the firm. Seven Valleys also manages a portfolio of stocks, bonds, venture capital and private equity, the source said.

The GM Building, home of Apple’s Manhattan flagship store, is worth about US$3.2 billion, filings from majority owner Boston Properties showed this year, making it among the most valuable office towers in the US. The Soho founders have a 20 per cent holding, a source familiar with the matter said.

The couple in 2011 bought 49 per cent of Park Avenue Plaza, the 1.2 million sq ft building that houses firms including Morgan Stanley, property records show.

Philanthropy focus

The couple’s US philanthropic efforts got off to a rocky start. They funnelled cash into sponsoring scholarships for Chinese students at Harvard and Yale University starting in 2014, triggering criticism on Chinese social media for not donating to the country where their fortune was built (each of their sons ended up studying at those schools).

Now, though, many of their donations are less controversial, such as educational programmes in Mr Pan’s home town in the north-western Gansu province. In September, Mr Pan stepped down from his role as Soho’s chairman and Ms Zhang resigned as chief executive, saying they wanted to focus on such philanthropic pursuits.

Their exit was “unusually elegant”, said Harvard Business School Professor Geoffrey Jones, who co-authored a case study on the couple’s philanthropy.

“It sort of chimes with Xi’s insistence that business has to do good and contribute to common prosperity, even though they have actually got a lot of their wealth out. So they are unlikely to face the kind of retaliation that rich families exiting are likely to face,” he said. BLOOMBERG

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