After weeks of hype and speculation, Chinese e-commerce giant Alibaba finally floated on the New York Stock Exchange last Friday, surging almost 40 per cent to trade at over $93, making its founder Jack Ma even richer and creating one of the biggest liquidity events in recent financial history.

After weeks of hype and speculation, Chinese e-commerce giant Alibaba finally floated on the New York Stock Exchange last Friday, surging almost 40 per cent to trade at over $93, making its founder Jack Ma even richer and creating one of the biggest liquidity events in recent financial history.

According to one report by Bloomberg, Ma is now worth a cool $26.5 billion, which means he now is second to Hong Kong’s Li Ka-Shing among the richest tycoons in the Asia-Pacific region.

Based on the share price of late Friday, Alibaba is now worth $231 billion, putting it above the likes of Amazon and EBay together and a potent sign of China’s economic prowess. Alibaba raised $21.8 billion in the IPO, smashing a record set in 2008 by the likes of Visa, the credit card firm.

“Alibaba accounts for 80 per cent of all online retail sales in China and the global excitement, anticipation and speculation around its IPO has been unprecedented.  However, it is important for UK investors to consider the nature and structure of the stock as the Chinese Government prohibits foreigners from investing directly into its key strategic interests – this includes Alibaba.  Because of this, the New York Stock Exchange (NYSE) listing is being facilitated by a Variable Interest Entity (VIE), so investors are not investing directly in the company but will be buying an offshore registered company which is under contract to receive profit from Alibaba's Chinese assets, without actually owning them. It is a structure already used by many Chinese internet companies listed in the US,” John Tracy, head of TD Direct Investing (Europe), said.

Such points highlight how, despite some of the wrinkles involved in owning such foreign stocks, non-Chinese investors are finding it easier to participate in such IPOs. The nature of Alibaba’s corporate ownership structure was a reason, reports say, why it chose to float in the US rather than nearer home in Hong Kong. Even so, with the Hong Kong-Shanghai “through-train” stock market link on the way, and other measures to improve investing infrastructure, the next blockbuster IPO may be in Asia.

As this publication has pointed out, such an event underscores the amount of wealth being created in Asia and the need for private banks and other wealth management players to ensure they tap into the riches being generated. So far, most of the wealth in the region is still “first-generation” – but an increasing amount in future won’t be, raising very different types of needs and structuring requirements.