Fund assets overseen by Hong Kong managers reached a record high last year after double-digit annual growth, according to the city’s financial regulator.
At the end of 2014 fund assets in Hong Kong had risen to HK$17.68 trillion ($2.26 trillion), representing a 10.5% year-on-year increase, the Securities and Futures Commission (SFC) announced yesterday.
Publishing its annual report on fund management activities, the SFC noted that international investors have contributed significantly to the increase in assets overseen by the city's managers, fund advisers and private banks. More than 70% of funds in Hong Kong are sourced from abroad.
“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,” said Julia Leung, the SFC’s executive director of investment products.
Breaking down the figures, asset managers made up the largest proportion of the fund management assets with HK$12.77 trillion by the end of 2014, up 11.9% from end-2013 figures.
That was followed by private banking businesses at HK$3.09 trillion, a 12.5% year-on-year increase from last year. Fund advisory business however decreased by 3% to HK$1.61 trillion.
Meanwhile, the SFC also boasted of strong results in support of Hong Kong's bid to establish itself as a fund domicile and management centre, acting as an intermediary for capital between mainland China and the rest of the world.
Of the HK$12.77 trillion of assets overseen by Hong Kong, HK$6.85 trillion of the assets were managed in the city, an 18% rise from last year. As of March this year, there were 594 funds domiciled in the city, a 26.7% increase from March 2014.
And of the assets managed in the city, a majority (HK$3.503 trillion) of these assets were invested in Hong Kong and mainland China, with the remaining invested in Japan, the rest of Asia and beyond.
Indeed, the number of products launched under the renminbi qualified foreign institutional investor (RQFII) scheme grew, resulting in the full allocation of the Rmb270 billion ($43.47 billion) quota. Meanwhile, direct access to Shanghai’s A-share market under Stock Connect has also spawned new products and investments.
By the end of May, the SFC had authorised 91 RQFII/renminbi Stock Connect funds with total assets of Rmb69.6 billion.
“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,” Leung said in a statement.