Saudi royal families look to set up offices in Hong Kong
The Hong Kong government is making headway in its push to attract high-profile Middle Eastern families, with preliminary deals struck for some royal or prominent Saudi families to establish investment vehicles in Hong Kong, an official said.
According to Jason Fong, global head of family office at Invest Hong Kong, the government is currently engaging with several Saudi families. Preliminary commitments have been secured from some of these families.
Some already have overseas bases, but are yet to set foot in Hong Kong, Fong told AsianInvestor.
As discussions with interested families are ongoing, with potentially more commitments, he said it is still premature to specify names or figures.
In total, over 100 families from across the world are in the process of putting down roots in Hong Kong as the government advances towards its target of attracting 200 single family offices by 2025, Fong said.
The appetite of wealthy Saudi families comes as they expect to leverage Hong Kong's gateway position to mainland China — especially the Greater Bay Area — for technology investments in artificial intelligence and data science, life science, fintech, advanced manufacturing, and new energy.
“They're extremely keen to explore opportunities in the Greater Bay Area,” Fong said. “They are even looking for pure play Chinese fund managers to help them manage their Chinese exposure.”
Geopolitical developments have also made Hong Kong an increasingly attractive proposition. Last week, Hong Kong was the first Asian host for Saudi Arabia’s flagship global investment summit, the Future Investment Initiative (FII) Institute.
On December 7, the Hong Kong government and the Ministry of Investment of Saudi Arabia signed a memorandum of understanding to foster cooperation on investment promotion exchange, while the two governments also launched formal negotiations on an investment promotion and protection agreement.
HEALTHY PROGRESS
The Hong Kong government set a target in late 2022 to attract at least 200 single family offices by 2025.
Fong said the government has exceeded its halfway mark towards the target and is in the process of helping those families set up shops in Hong Kong.
Around 60% of the 100-plus families are Chinese, either from the Chinese mainland or overseas. Southeast Asian families come second, while there is also “a pretty healthy proportion” from Africa, Australia, Canada, the United Kingdom, the United States, as well as the Middle East, Fong said.
To strengthen ties in the Middle East and maintain active partnerships, Invest Hong Kong recently appointed Nikolaos Koutsoukos as head of family office, Middle East, under the Commerce and Economic Development Bureau. Koutsoukos is based in Dubai.
“[The Middle East] is a key market for our strategic plan,” Fong said, believing that the just-concluded FII Institute conference in Hong Kong will further help consolidate the relationship between Hong Kong and Saudi Arabia as well as the whole Middle East region.
Fong noted that families and ultra-high-net-worth individuals (UHNWIs) in the Middle East expect to capture growth opportunities in the world’s second largest economy.
They seek to better balance their investment portfolios by bolstering their exposure to Asia, including mainland China, which have been underrepresented relative to allocations in the US and Europe.
“That's why they would need to have professionals who know it inside out in the Chinese market and have the international exposure to help them to go into the China market. So that, by default, is Hong Kong,” he said.
TECH EXCHANGE
The Hong Kong government in late 2022 also established an Office for Attracting Strategic Enterprises (OASES) to get enterprises from across the world to establish a presence in Hong Kong, with a focus on innovation and technology.
This included UK biopharmaceutical enterprise AstraZeneca, which opened its research and development centre in Hong Kong in November.
Fong said this was also a reason for Middle Eastern families to have an office in Hong Kong.
“They want to engage early [with these enterprises] and bring those technologies back to the Middle East,” Fong said.
Both Saudi Arabia and the United Arab Emirates (UAE), for example, have made it a national vision to develop innovation and technology to diversify the economy.
ALSO READ: Asian family offices eye Saudi investment opportunities
“Hong Kong stands at a very advantageous, unique place to help to bridge the Middle East to our motherland China,” Fong said.
With the next Wealth for Good in Hong Kong Summit coming next March, the Invest Hong Kong team is primed to give renewed impetus to the 200-family-office target when it hosts family offices from across the globe and showcases the opportunities that Hong Kong has to offer.