SOMETIME in 1987, Mr. Uy (not his real name) invested in a small piece of property and constructed a five-storey apartment building.
With rental escalation picking up every year, he ended up focusing his efforts on properties with potential recurring income.
Mr. Uy saw the potential windfall in real estate and decided to concentrate full time. With China’s transformation as the factory of the world offering low cost products, he decided it was time to divest in the furniture business. Three years later, he sold all his shares to his partners.
With sufficient capital, he then used the money to acquire more properties and in 1995, ventured into his first real estate development: a 25-storey residential development in Manila.
With a string of successes save for the 1997 Asian financial crisis, where he unloaded some of his assets to pay off some debts, Mr. Uy navigated his way to many successful projects by prudently managing his cash flow.
For someone who started as a salesman, he was able to grow his wealth with a mixed portfolio of condominiums, office buildings, and a string of neighborhood retail spaces. At age 72 (in 2012), his net worth was valued at almost P4 billion.
Then one day, he suffered a heart attack while inspecting of one of his high rise developments in Manila. That health scare triggered a lot of changes and made him realize that he had to do something to ensure the continuity of the family business.
With his deteriorating health condition, Mr. Uy, through the advice of his accountant, immediately placed all his real estate assets in a corporation and distributed the shares to his wife and four children. His aspiration is for his children to work together and maintain their future ownership in a single real estate enterprise.
Typical of a Filipino-Chinese mindset, he gave more shares to his two sons (now in their 40s), who were actively involved in the business but gave only minimal shares to his two other daughters (also in their mid and late 30s).
The traditional practice among Chinese families still holds–that daughters should have fewer shares than their male sibings, as they will be taken care of by their husbands.
The youngest of the children, Irene, single, has been with the family business for nearly four years. After working as an operations executive in a multinational corporation for five years, she was requested by her father to join the family business. This was after another sister Lucy got married and migrated to Australia.
After Mr. Uy passed away in 2014, she soon made changes in the way the business was run. Her skills and passion significantly contributed to the growth of the family enterprise. In just two years, the business process that Irene introduced generated substantial savings and goodwill for the business.
Over time, Irene’s leadership was starting to get noticed and recognized by her industry peers and even the partners of her late father were impressed with her acumen.
They also found her to be charming and a great negotiator.
On the other hand, the male siblings who had no outside work experience felt the pressure of having a skilled and savvy younger sister, thus the day-to-day management soon became a source of strained relations between the male siblings and Irene.
The usual conflict would always center on the strategic direction of the business. Irene, more frequently, would always question the wisdom of her older male siblings’ investment decisions. And in most cases, albeit after the fact, Irene would always be proven right but out-voted.
Next week: Lucy rejoins the family business.
Prof. Soriano is an ASEAN family business advisor, book author and executive director of ASEAN-based consulting group, W+B Strategic Advisory. He is also an international business lecturer and professor at the Ateneo Graduate School of Business.