Hong Kong’s VMS Group, a multifamily office managing just under $4 billion for some of the territory’s wealthiest dynasties, has decided that 2025 is the year to dip its institutional toes into cryptocurrency waters—albeit with the measured enthusiasm of someone testing a potentially scalding bath.
The firm, founded in 2006 and traditionally focused on private equity’s patient capital approach, plans to allocate up to $10 million through Re7 Capital‘s decentralized finance strategies. This represents roughly 0.25% of assets under management—a percentage so modest it suggests either profound institutional caution or the kind of portfolio experimentation that billionaire families can afford to treat as expensive education.
Managing partner Elton Cheung emphasized the allocation’s fluid nature, noting the exact investment size remains under consideration. This hedge-laden language reflects the institutional reality of crypto adoption: even when family offices embrace digital assets, they do so with multiple escape routes mapped.
VMS’s choice of DeFi hedge funds over direct Bitcoin exposure reveals sophisticated risk management thinking. Rather than enduring cryptocurrency’s notorious volatility directly, the firm seeks Re7 Capital’s double-digit yields achieved since 2021—essentially outsourcing the crypto complexity while capturing potential returns. The strategy includes providing liquidity on decentralized exchanges and lending stablecoins to generate consistent returns. This approach leverages DeFi’s permissionless blockchains to facilitate peer-to-peer transactions without traditional financial intermediaries.
Sophisticated wealth managers prefer outsourcing crypto volatility to specialized funds rather than wrestling with Bitcoin’s notorious price swings directly.
The timing aligns with Hong Kong’s evolving regulatory landscape, which has transformed from crypto skepticism to cautious institutional embrace. Younger family members are reportedly driving demand for digital asset exposure, creating generational pressure that traditional wealth managers can no longer ignore. The firm recently formed a partnership with a former SenseTime executive to enhance its artificial intelligence investment capabilities.
Beyond pure investment, VMS explores operational crypto integration through Vietnam real estate projects, where it holds majority ownership. This dual approach—investment allocation plus operational deployment—suggests genuine strategic commitment rather than mere portfolio tokenism.
Zhi Li, leading VMS’s London office since December 2023, spearheads these crypto explorations, indicating the firm’s international scope for digital asset integration.
The broader context reveals institutional crypto adoption’s measured pace: even $4 billion family offices enter with carefully calibrated exposures, seeking liquidity solutions for increasingly illiquid private equity portfolios.
VMS’s crypto venture represents evolution rather than revolution—wealthy families adapting traditional wealth preservation strategies to include digital assets, provided someone else handles the technical complexity.
