One year after Adrian Cheng resigned as CEO of his family’s Hong Kong property firm, New World Development Co., the mega-collector has announced his next venture: ALMAD Group.
The details of the new business are predictably fuzzy. The announcement reads like Cheng, who will serve as founder and executive chairman, filled out a tech-investment Mad Libs: the company will focus on digital assets, blockchain technologies, and “immersive digital experiences” across entertainment, sports, and media in mainland China, Southeast Asia, and the Middle East.
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“Our mission is clear: to build what the next generation needs and to shape a future economy filled with possibilities,” Cheng, a regular on the annual ARTnews Top 200 Collectors list, said.
More concretely, ALMAD resolved one lingering question from Cheng’s exit from NWD: the fate of K11 by AC, his art-meets-commerce platform. Now absorbed into ALMAD, the business oversaw initiatives such as the K11 Craft and Guild Foundation, devoted to preserving traditional Chinese craftsmanship, and the K11 Art Foundation, which promoted emerging Chinese artists and has staged more than 60 exhibitions across China. Its most visible concept was the K11 Art Malls—about half a dozen spaces in Hong Kong and mainland China that pair luxury retail with exhibitions and large-scale works by contemporary stars like Damien Hirst and Takashi Murakami.
Last year, New World sold the K11 business to Cheng for $26.9 million, a deal that covered leasing, brand marketing, and other “commercial strategic services.” The underlying properties, however, remain with New World, the company told the South China Morning Post.
Cheng stepped down from New World last September after the company reported its first annual loss in two decades—a staggering $2.5 billion. He also withdrew from other family-controlled businesses, including parent company Chow Tai Fook Enterprises, according to Reuters.
The crisis at New World has deepened since then. In June, the real estate giant secured a record $11 billion refinancing package from a consortium of banks to stave off default. The deal was seen as so high-risk that both bankers and government officials worried a collapse could spark a financial crisis: New World holds $40 billion in Hong Kong assets, equal to roughly 10 percent of the city’s GDP, according to Barclays.
With Hong Kong’s property slump dragging on, the company has been pressed to restructure further. Bloomberg reported Monday that New World is in talks with the city’s Airport Authority to cut rent at its 11 Skies mall, part of a government push to develop the airport area as a luxury retail and leisure hub. The developer has also explored selling 11 Skies and other properties, while seeking new investors.
For Cheng, though, those troubles appear to be in the rearview. Cut loose from New World, he is free to chase what he called in his ALMAD announcement the “new frontiers” of the global economy. The NFT and digital-asset frenzy may feel long past, but as always with crypto and blockchain, there is likely another wave coming. After all, there’s always more investment for, in the words of ALMAD’s release, “Web3 financial innovation.” Bitcoin hit a new all-time high just last month.