Hong Kong Fund Management Growth Sets Record

Hong Kong Clock Tower - Hong Kong Fund management growth
Hong Kong Clock Tower

The annual Hong Kong Fund Management Activities Survey (FMAS) released today by the Securities and Futures Commission (SFC) shows that the combined fund management business in Hong Kong hit another record high of $16,007 billion as of the end of 2013, representing year-on-year growth of 27.2%.

The latest survey indicates that Hong Kong continued to be a preferred platform for international investors to invest in Asia. Contributions from overseas investors reached a historic high of $11,382 billion, 72% of the total fund management business in 2013.

[quote]”The record high assets under management (AUM) of our combined fund management business at the end of 2013 ranks us among the top asset management hubs in Asia ex Japan.  Significant inflows of overseas capital underscore the value and attractiveness of our open markets and our role as an international asset management centre,” said Mrs Alexa Lam, the SFC’s Deputy Chief Executive Officer and Executive Director of Investment Products, International and China.[/quote]

Below is a breakdown of the performance of Hong Kong Fund Management players:

  • Licensed asset management and fund advisory corporations continued to contribute the largest proportion of the combined asset management business.  Their aggregate asset management and fund advisory businesses amounted to $11,788 billion at the end of 2013, up 28.4% from end-2012.
  • Registered institutions recorded a 27.8% increase in their aggregate asset management and other private banking businesses to $3,678 billion at end-2013.
  • Insurance companies reported a 1.7% increase in their assets under management to $364 billion at end-2013.

[quote style=”boxed”]”Hong Kong’s fund industry is trending up the value chain with more market professionals engaging in the high value end of the business. Hong Kong’s strength in product innovation and in particular our lead in renminbi product development are a key driver behind the growth of its fund management business,” Mrs Lam added.[/quote]

Some highlights of the Hong Kong Fund Management Activities Survey (FMAS) include:

  • Non-REIT (real estate investment trust) asset management business increased by 38.5% to $11,417 billion in 2013.  Of this amount, $5,827 billion worth of assets (or 51.0%) was managed in Hong Kong and 74.6% of these assets managed in Hong Kong were invested in Asia.
  • Other private banking business increased by 2.7% to $2,752 billion in 2013.
  • Fund advisory business grew by 11.6% to $1,661 billion in 2013.
  • The market capitalisation of SFC-authorized REITs increased by approximately 1.7% to $177 billion in 2013.

The FMAS report notes that Hong Kong is committed to maintain its lead as the centre for creation and development of renminbi assets, products and services.  At the same time, as the number of Mainland-related financial institutions establishing operations in Hong Kong continues to increase, they have brought new opportunities to the Hong Kong market.

Furthermore, the report notes that the SFC continues its efforts to facilitate market development and safeguard investor interests through launching various facilitative measures and regulatory initiatives. The SFC is also committed to investor education and the ongoing monitoring of investment products.

“The SFC will continue to follow through with the Mainland regulatory authorities on arrangements in relation to the mutual recognition of funds between Hong Kong and the Mainland. This initiative will help promote Hong Kong domiciled funds. Increased AUM will further develop the ancillary professional service sectors engaged in the product development, investment management and distribution of sales of funds. We need to take positive steps to ensure that we have a robust and attractive platform with sufficient expertise to capture the ever-growing opportunities in the region, with China as one of the key driving forces of economic growth,” Mrs Lam said.

The FMAS has been conducted annually since 1999 to help the SFC assess the industry’s state of affairs for policy setting and operations planning. This year, a total of 555 institutions responded to the survey on a voluntary basis. They included 488 licensed asset management and fund advisory corporations, 47 registered financial institutions and 20 insurance companies


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