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The Securities and Futures Commission (SFC) today released its annual Fund Management Activities Survey (FMAS) which shows that the combined fund management business (Note 1) in Hong Kong decreased slightly by 1.6% year-on-year to $17,393 billion (Note 2) as of 31 December 2015.
The survey's findings indicate that funds sourced from overseas investors accounted for 68.5% of Hong Kong’s fund management business (excluding real estate investment trusts (REITs)). During the year, aggregate private wealth management business including both the private banking business and private client funds, which form part of the asset management and fund advisory business, increased by 4.3% to $4,775 billion.
"Amid a volatile year in global markets, Hong Kong maintained its position as a leading international fund management centre," said Mr Ashley Alder, the SFC's Chief Executive Officer. "Following the successful implementation of the groundbreaking Mainland-Hong Kong Mutual Recognition of Funds (MRF) scheme, the SFC will pursue strategies to further develop Hong Kong as a global, full service asset management centre."
Below is a breakdown of the performance of different market players during 2015:
- Licensed corporations registered a year-on-year decrease of 6.2% in their aggregate asset management and fund advisory business to $12,123 billion, representing the largest proportion of the combined fund management business.
- Registered institutions recorded a 12.1% increase in their aggregate asset management and private banking business to $4,602 billion.
- Insurance companies reported a 3.5% increase in their assets under management to $468 billion.
Some other findings of the survey:
- Asset management business decreased by 4% to $12,259 billion.
- The proportion of assets managed in Hong Kong increased consistently over the past three years and reached 55.7% of the asset management business.
- More than 58% of the assets managed in Hong Kong were invested in equities.
- The market capitalisation of SFC-authorized REITs remained steady.
The FMAS report also notes that the SFC is actively pursuing strategies to enhance the market infrastructure for the asset management business in Hong Kong. Following on the implementation of the Mainland-Hong Kong MRF scheme, the SFC will continue to explore similar cooperation arrangements with other jurisdictions. Other initiatives include introducing a new legal and regulatory framework for open-ended fund companies, developing online and alternative fund distribution platforms, and working closely with the industry to broaden the types of fund products.
The FMAS has been conducted annually since 1999 to help the SFC assess the state of the industry for policy and operational planning. This year, a total of 621 institutions responded to the survey on a voluntary basis. They included 555 licensed asset management and fund advisory corporations, 45 registered financial institutions and 21 insurance companies (Note 3).
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Notes:
- Combined fund management business includes SFC-authorized REITs as well as other sub-sectors of asset management, fund advisory and private banking, which are broadly categorised as "fund management business (excluding REITs)" in the report. Please see the appendices for some key findings.
- Unless stated otherwise, the values given are in Hong Kong dollars.
- Respondents fall into three categories:
(i) asset management and fund advisory companies licensed under section 116 or 117 of the Securities and Futures Ordinance (SFO);
(ii) registered institutions under section 119 of the SFO, which are authorized financial institutions as defined in section 2(1) of the Banking Ordinance; and
(iii) insurance companies registered under the Insurance Companies Ordinance providing long term business.
