Hong Kong recognized
as enabler of GBA fund
industry’s growth

Hong Kong’s role in nurturing the offshore Chinese asset management industry has been hailed by the city’s government as an agent of future prosperity on both sides of the border.

Christopher Hui, Secretary for Financial Services and the Treasury of Hong Kong said the city was a powerful force in bringing wealth-growing opportunities to both local and Mainland Chinese investors. Speaking at the 2023 Offshore China Fund Awards hosted by Bloomberg and the Chinese Asset Management Association of Hong Kong (HKCAMA), Hui noted that net inflows for 2023 were more than HK$87 billion ($11.1 billion), 92% more than the previous year. He also pointed out that Hong Kong’s assets under management is set to grow at 7.6% per annum between 2022 and 2027, and is on track to become the world’s largest booking center by the end of 2025.

Hui said coordination between the entities within the Greater Bay Area, which comprises nine major southern Mainland cities, Hong Kong, and Macau, was boosting the funds industry.

“On financial cooperation in the Greater Bay Area, the enhanced ‘Wealth Management Connect’ has been officially implemented to further facilitate diverse asset allocation for residents of the two places,” Hui told the gathering in Hong Kong. “Looking ahead, Hong Kong will continue to enhance the competitiveness of the asset- and wealth-management industry to serve the needs of national development and global investors.”

The awards ceremony offered the opportunity for Hui and industry leaders to highlight the highs of the past year while also recognizing the challenges ahead. From innovations that are likely to add momentum to an already booming industry — including the creation of new virtual assets and the application of artificial intelligence (AI) — to the looming tests presented by uncertain interest rates and geopolitical tensions.

At the ceremony, 38 awards were presented to firms that had made outstanding contributions to China’s offshore fund industry. Hui reminded the gathered dignitaries from the GBA’s financial sector that Hong Kong was Asia’s largest hedge-fund center and the second-largest center for private equity management after the Mainland. It is also popular with global family offices and wealth owners.

Gathered dignitaries

Among attendees were Christina Choi, Executive Director for the Investment Products Division at the Securities and Futures Commission (SFC), Hong Kong’s financial regulator; Bonnie Y Chan, Chief Executive Officer of Hong Kong Exchanges and Clearing Limited (HKEX), the city’s stock market operator; Doris Lian, Chairperson of the HKCAMA; and, Bing Li, Head of Asia Pacific for Bloomberg.

The 2023 awards marked the ninth year that excellence among the region’s asset and wealth managers has been recognized. The awards are given for best performance in various categories. Performances were based on data compiled by Bloomberg and calculated using proprietary methodologies.

Among the funds that won multiple awards were the BOCIP China Value Fund, the BOC-Prudential Easy-Choice Mandatory Provident Fund Scheme — Core Accumulation Fund, and the BOCHK Balanced Growth Fund.

The SFC’s Choi reasserted the regulator’s dedication to playing a part in growing Hong Kong’s funds business.

“The SFC is committed to support the industry and work closely with Chinese asset managers to bring Hong Kong to the next level as aleading international asset and wealth management center through deepening our comprehensive mutual market access initiatives with the Mainland and extending new connections to other markets, embracing innovation and building new market infrastructure,” she told the gathering.

The Mainland Chinese part of the GBA comprises Guangzhou, Shenzhen,
Zhuhai, Foshan, Dongguan, Zhongshan, Jiangmen, Huizhou and Zhaoqing. The HKCAMA seeks to harness the huge levels of prosperity within the region through mechanisms such as the Wealth Management Connect and Bond Connect schemes. These facilitate financial exchanges between the Mainland and the Special Administrative regions of Hong Kong and Macau.

HKCAMA Chairperson Doris Lian urged members to seize opportunities in the region, including China’s international development project.

“HKCAMA calls upon the fund industry to take advantage of Hong Kong’s unique strengths and actively engage in national initiatives, including the Belt and Road and the development of the Greater Bay Area to further elevate Hong Kong’s status as an international financial center,” she said.

Future Commitments

HKEX is also partner in the cross-border development project and its Chief Executive Officer Bonnie Y Chan pledged to continue that support.

“We are committed to enhancing our services for both issuers and investors through continuous reforms and innovation,” Chan told the ceremony. “We look forward to working closely with our stakeholders on this ongoing journey to elevate the attractiveness of Hong Kong’s markets and deepen our partnership with the Mainland’s financial markets.”

The global importance of Hong Kong as a financial locus was stressed by Bloomberg’s Li, who said the city would continue to “assert itself” in the role.

“Against the backdrop of this growth, the Chinese fund industry has shown itself to be a sector of resilience and potential,” Li said. “We look forward to seeing further growth and performance from this exciting community of sophisticated asset managers and investors.”

After successfully navigating the choppy waters of 2023, the GBA’s asset managers are poised to capitalize on the healthy prospects for the coming year. With more funds opening, more money invested into the region and cross-border ties growing ever closer, the funds industry is focused on a year of growth.