SFC Reports Hong Kong’s Growth As International Investment Hub
As the Chinese stock market continues to spiral down, news agencies continue to report on the efforts of the government to abate the crash. In contrast, the Securities and Futures Commission of Hong Kong is reporting another record year of investment in the fund management business (here).
The combined fund management business grew to a value of over $17.6 billion for 2014 the regulator reported. That represents a 10.5 % increase over the prior year. It also contrasts with 2010 when the value of the combined fund management business was just over $10 billion, illustrating the dramatic grow of the business in just four years.
About $17.4 billion of the reported $17.6 billion for 2014 represented the non-REIT fund management business while about $206 million was the capitalization of REITS. That represents: $11.3 billion for licensed corporations; $1 billion for registered institutions; $452 million for insurance companies (less certain assets); $3 billion for other private banking businesses of registered institutions; and $1.6 billion for the fund advisory business.
Much of the growth was fueled by overseas investors. According to the report about $12.4 billion of the $17.4 billion invested in the fund management business came from overseas investors. That represents an increase by about 9% of the amount of funds from overseas investors. The overall percentage of overseas investment remained about constant compared to the prior year. In 2010 overseas investment represented 71% of the overall compared to 71.9% in the prior year which was up from the 64.6% in 2012.
The asset management business in Hong Kong also continued to grow. In 2014 the non-REIT assets managed in Hong Kong increased by 17.7% compared to the prior year, accounting for about $6.8 billion. While the percentage of assets managed in Hong Kong increased compared to the prior year, it was down from the high of 69.2% in 2012 and slightly below 2011 and 2011.
The report attributes the growth since 1999 when it was first issued to the “robust regulatory regime . . .[which] is fundamental to Hong Kong’s development as an international asset management centre. . .” and the SFC’s continued cooperation and work with international regulators.