Hong Kong’s fund management assets reached HK$17.7 trillion in 2014, a record high for the industry, largely driven by foreign investors that channel their cash in the city to gain greater exposure to China’s still expanding economy.

 

A Securities and Futures Commission (FSC) survey reveals that the industry grew 10.5% last year from a year ago following contributions from foreign investments, another record, accounting 71% or HK$12.4 trillion of the industry’s value.

 

The total industry value represents all assets reported in the sub-sectors of asset management, fund advisory, private banking or broadly categorized as non-real estate investment trust (non-Reit) fund management business,, and SFC-authorized Reits.

 

Hong Kong’s fund management was the preferred platform for investors, the SFC cites.  Assets managed in Hong Kong increased by nearly 18% to a record HK$6.9 trillion. 

 

“The latest survey underscored the trend of sustained growth in assets managed in Hong Kong, driven by our role as an intermediary for capital between the Mainland financial markets and the rest of the world,” says Julia Leung, the SFC executive director of investment products.

 

“The launch of the mainland-Hong Kong mutual recognition of Funds scheme on 1 July will further encourage growth in this area and promote Hong Kong as a fund domicile and investment management centre,” she adds.

 

The survey also reveals the following:

 

·         Licensed asset management and fund advisory corporations totalled HK$12.9 trillion at the end of the year. They went up 9.6% and once again represented the largest proportion of the combined asset management business.

 

·         Registered institutions recorded an 11.6% increase in the total of asset management and other private banking businesses. This reached HK$4.1 trillion.

 

·         Insurance companies reported a 24.2% increase to HK$452 billion for assets under management.

 

·         Non-Reit asset management business increased by 11.9% to HK$12.77 trillion. 53.7% of this ($6,856 billion) of this was managed in Hong Kong.

 

·         72.5% of the assets managed in Hong Kong were invested in Asia.

 

·         Other private banking businesses increased by 12.5% to $3.1 trillion.

 

·         Fund advisory business decreased by 3% to $1.611 trillion.

 

The market capitalisation of SFC-authorized REITs increased by approximately 16.4% to $206 billion. This survey is being been done every year since 1999 to help the SFC evaluate the state of the industry for planning purposes.