Hong Kong has a lot of potential as regional asset management hub

Fund and corporate services provider Alter Domus inaugurates new office in HK, reflecting growth of its business

Alter Domus, a fully integrated fund and corporate services provider, recently inaugurated its new office in Hong Kong. Building upon its significant decade-long presence in the market, the relocation to a larger office space is a reflection of the exponential growth of the business and team.

Alexander Traub, head of Asia-Pacific, says, “The expanded office space in the new location not only demonstrates Alter Domus’ commitment to Hong Kong but also the strong outlook for asset management in the market and across the region. It will also support the company’s range of growth in APAC in terms of revenue, which currently stands at 50% YoY.”

Aligning with this growth, Alter Domus conducted an alternative asset servicing survey which found that booming private markets in APAC are increasingly looking to asset servicers. Alter Domus’ success in the APAC market is driven by the continuous growth of asset managers’ activities in the region, as well as the trend of moving from the insourcing to outsourcing of fund services.

According to the survey, 55% of asset managers outsource their services with no intention to change, while 14% who are currently insourcing their services are planning to outsource. Survey results, in terms of asset class focus, also showed that there is sustained growth of private equity and real estate sectors amongst asset managers. The global private markets are forecasted to grow to US$16.3 trillion in 2025 from US$8.7 trillion in 2018.

 The survey also identified that a fair amount of asset managers will still continue to invest in China – which is the most popular APAC investment destination (26%), followed by Australia (22%), and Singapore and Hong Kong (both at 10%).

Many of these asset managers rely on services outside of China to operate and administer their investments there, which is where Alter Domus comes in with its fund administration in China and strong onshore capabilities. As the majority of fundraising and inflow of capital in China is coming through from Hong Kong, regulatory support to open up the financial market has also created a more favourable environment for asset managers to operate and administer their funds and assets in Hong Kong.

A number of new fund structures in APAC also look likely to be the trigger for greater centralization. The survey showed that almost half (46%) of respondents are planning to use the new fund structures. The most popular vehicle is the Singapore Variable Capital Company (VCC) structure, which almost a quarter (24%) plan to use in future. Ten percent plan to use Hong Kong’s Open-ended Fund Companies (OFC) structure and a further 10 percent Australia’s Corporate Collective Investment Vehicle.

Alter Domus surveyed executives from 42 investment management firms based in the Asia-Pacific. The survey included both qualitative and quantitative questions – 19 percent of the survey respondents are CFO, followed by financial director (12%) and fund managers (10%).

Date

15 Nov 2019

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