Hong Kong's $4B Family Office VMS Group Makes First Crypto Investment

VMS Group, a Hong Kong-based multifamily office managing just under $4 billion in assets, is making its first foray into cryptocurrency by allocating up to $10 million to decentralized finance hedge fund Re7 Capital, according to a report in Bloomberg on Monday

The move represents a strategic shift for VMS, which has traditionally focused on private equity and longer-duration investments since its founding two decades ago. Managing partner Elton Cheung said the crypto allocation is part of broader diversification efforts into more liquid investments as private companies increasingly delay public offerings, making exits more challenging.

VMS serves some of Hong Kong's wealthiest families from property development to conglomerate businesses, though Cheung declined to identify specific clients. The firm operates funds across various sectors including internet technology and pharmaceuticals, and partnered with a former SenseTime executive in 2023 to pursue AI investments.

"We thought this was the right time because of growing demand and because we see clearer legislative and government support from various jurisdictions, as well as large institutional support and endorsement," Cheung told Bloomberg.

The timing aligns with broader institutional crypto adoption following Donald Trump's election victory in November on a pro-crypto platform. Bitcoin has surged approximately 50% since the election, while Circle Internet Group's successful IPO this month has further bolstered market momentum.

Rather than direct token investments, VMS chose Re7 Capital's market-neutral DeFi strategies to limit volatility. Re7 generates yield through liquidity provision on decentralized exchanges and stablecoin lending while using hedging to mitigate price swings.

"The reason investors keep coming back to crypto is the asymmetry of risk and return," Re7 Capital founder Evgeny Gokhberg told Bloomberg. "Typically, people think about asymmetry in crypto as 'lose it all or make a 100x.' That's rarely a fit for a serious allocator with a reputation to lose."

Re7 Capital has generated consistent double-digit yields since its 2021 inception, according to Gokhberg. The firm specializes in DeFi yield and liquid alpha strategies using proprietary analytics systems for real-time blockchain data and risk monitoring.

VMS is also exploring partnerships with digital asset payments and infrastructure projects through Zhi Li, who joined the London office in December 2023 to lead digital asset investing. This includes studying crypto payment integration for a Vietnam real estate project where VMS holds majority ownership.

"There is very strong institutional and family interest in getting regulated digital asset exposure," Li said. "We have seen the younger generation of families wanting to do something different."

The development reflects broader wealth management industry trends, with JP Morgan Chase recently announcing plans to let wealth management clients use cryptocurrency-linked assets as loan collateral.