Nisha Gopalan is a Bloomberg Gadfly columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.

Sometimes, being Superman isn't enough. Brexit may just defeat much of Li Ka-shing's plan to leave his eldest son Victor with a trust-like empire.

If any Asian billionaire is deserving of a reputation for being savvy, it should be Hong Kong's richest man. Li's investing prowess has made him one of the world's wealthiest tycoons, and earned him that superhero moniker. Now, according to the Wall Street Journal, the 88-year-old is preparing to step down as chairman of his global conglomerate, CK Hutchison Holdings Ltd., by July next year.

The business empire being left to Victor, however, bears little resemblance to the much more volatile, Hong Kong-focused group that Li acquired decades ago. Ports and assets in the former British colony are a much smaller part of the sprawling corporation, while a spate of dealmaking post the global financial crisis has added international retail and power businesses.

With utilities accounting for the biggest portion of Hutchison's earnings, the group has become, in effect, a trust company. Even Li's Cheung Kong Property Holdings Ltd., created in a 2015 mega-restructuring ostensibly to house the real-estate operations, has moved into more cash-flow generating assets such as aircraft leasing and Australian utilities.

The Empire
Li Ka-shing's net worth is largely in his CK Hutchison conglomerate and his Hong Kong-focused real estate arm
Source: Bloomberg Billionaires Index

Except this empire isn't as safe as it looks. While it would seem having gas and water assets outside of Hong Kong should shield Victor from market turbulence, no amount of canny investing could have predicted last year's Brexit vote and the impact that had on the pound. If an exit from the European Union comes to pass, the ramifications for Britain's economy could be severe.

Li, through CK Hutchison and Cheung Kong Infrastructure Holdings Ltd., is the U.K.'s biggest foreign investor. CK Hutchison derives 36 percent of its earnings there, while 41 percent of Cheung Kong Infrastructure's revenue comes from the country. Among Li's British assets; water and electricity firms; one of the country's four mobile-phone networks; the Superdrug and Savers stores; plus ports in Harwich, Felixstowe and London. A slowing economy is bound to hurt both retail and import appetite.

Rule Britannia
Li Ka-shing's CK Hutchison made 36 percent of its earnings before interest and tax from the U.K. last year
Source: Company filings
Note: Asia, Australia & Others includes Panama, Mexico and the Middle East.

Li made the right choice in diversifying and buying defensive targets. He wrapped up his largest overseas deal on record in April with the A$7.4 billion ($5.6 billion) takeover of Australian power provider Duet Group, which also provided a tilt away from the U.K.

Unfortunately, though, Li hasn't diversified quite enough, at least geographically. Victor is a long way from resting easy.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Nisha Gopalan in Hong Kong at

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