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Hong Kong Continues To Grow Its Fund Management Business

Friday, July 22, 2011

The Securities and Futures Commission (SFC), in its annual survey of fund management activities, confirmed that such business in Hong Kong reached over HKD10 trillion (USD1.3 trillion) last year, up 18.6% compared to 2009.

The increase outperformed the previous annual record of USD9.6bn achieved in 2007, and suggested a return of investor confidence in global financial markets and continuing inflows of investment capital into the Asia Pacific region. It also found that Hong Kong continued to be a preferred location for international investments.

Overseas investors contributed HKD6.6 trillion (or 66%) of Hong Kong’s total fund management business, excluding real estate investment trusts (REITs). The number of intermediaries engaging in asset management business also grew in 2010 by about 10% from 2009.

Licensed asset management and fund advisory houses continued to contribute the largest proportion of total asset management business in Hong Kong. Their aggregate business amounted to HKD7.3bn in 2010, recording a year-on-year increase of 13.3% from 2009.

Some other highlights of the survey include that, for non-REIT asset management business, almost HKD4.2bn of assets were managed in Hong Kong and 79.7% of these assets were invested in Asia; other private banking business grew more than 32% to HKD2.2bn; and the market capitalisation of SFC-authorized REITs recorded a growth of approximately 39% to HKD103bn, in 2010.

The report also highlighted the three key aspects that the SFC has been focusing on to enhance the status of Hong Kong as a leading asset management centre - strengthening the regulatory framework for public offers of investment products; contributing to the process of renminbi internationalisation and fostering closer ties with the Mainland market; and developing exchange-traded-fund (ETF) market and implementing new measures to enhance transparency of synthetic ETFs.

The SFC’s Acting Chief Executive Officer Alexa Lam said: "Hong Kong will strive to fortify its position as an international asset-management centre and an offshore renminbi centre. The SFC will continue to work with all to capitalise on our robust regulatory framework and local asset-management expertise to attract international investors to select Hong Kong as an investment platform.”