HK Fund Management Business Records Strong Growth in 2012
The latest survey indicates that Hong Kong continued to serve as an investment platform for attracting capital from non-Hong Kong investors. Overseas investors contributed $8,018 billion (or 64.6%) to the total fund management business, excluding real estate investment trusts (REITs), in 2012. Their contribution has consistently remained above 60% over the past five years.
“There has been overall growth in different types of fund management business activities from an increasing pool of market players,” said Mrs Alexa Lam, the SFC’s Deputy Chief Executive Officer and Executive Director of Investment Products, International and China. “With an integrated network of institutions, availability of financial expertise, a diverse investor base, and a robust and transparent regulatory framework, Hong Kong continues to be recognised as an international asset management centre in Asia.”
Below is a breakdown of the performance of different market 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 $9,178 billion at the end of 2012, up 47.9% from end-2011.
• Registered institutions recorded an 18.8% increase in their aggregate asset management and other private banking businesses to $2,877 billion at end-2012.
• Insurance companies reported a 24.7% increase in their assets under management to $358 billion at end-2012.
Some highlights of the survey include:
• Non-REIT asset management business increased by 43.1% to $8,246 billion. Of this amount, $5,707 billion worth of assets (or 69.2%) was managed in Hong Kong and 80% of these assets managed in Hong Kong were invested in Asia.
• Other private banking business increased by 18.4% to $2,679 billion in 2012.
• Fund advisory business grew by 67.4% to $1,488 billion in 2012.
• The market capitalisation of SFC-authorized REITs recorded growth of approximately 40.3% to $174 billion in 2012.
The FMAS report notes that the SFC continued its efforts in maintaining high market standard to protect the investing public through ongoing monitoring of investment products, enhancing product disclosure and reinforcing investor education. Furthermore, the SFC continued to strengthen its cross-border collaboration with the Mainland to support renminbi internationalisation by facilitating the development of a broader range of renminbi investment products available to the public.
“The SFC will continue to work with the Mainland regulatory authorities, the Hong Kong Government and the industry to further enrich product offerings and promote Hong Kong as a platform of choice for international asset managers and investors to access the Mainland markets as well as the natural and preferred platform for Mainland liquidity and players as they continue to venture out into the world.” Mrs Lam added.
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 485 entities responded to the survey on a voluntary basis. They included 417 licensed asset management and fund advisory houses, 46 registered financial institutions and 22 insurance companies (Note 3).
1. The term refers to the overall value of assets reported in the sub-sectors of asset management, fund advisory, private banking (broadly categorised as non-REIT fund management business) as well as SFC-authorized REITs.
2. Unless stated otherwise, the values given are in Hong Kong dollars.
3. Respondents fall into these categories: 1) asset management and fund advisory companies licensed under section 116 or 117 of the Securities and Futures Ordinance (SFO); 2) registered institutions under section 119 of the SFO, which are authorized financial institutions as defined in section 2(1) of the Banking Ordinance (Chapter 155); and 3) insurance companies registered under the Insurance Companies Ordinance (Chapter 41) providing long-term business.
4. Please see appendices for some key findings of the report.