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 sustained another year-on-year increase to reach a record high of $17,682 billion (Note 2), up 10.5%, as of the end of 2014.
The survey’s findings indicate that Hong Kong remained a preferred platform for international investors, who contributed an historic high of $12,404 billion and accounted for 71% of the fund management business (Note 3). Assets managed in Hong Kong increased by nearly 18% to a record level of $6,856 billion.
“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 Ms Julia Leung, the SFC’s Executive Director of Investment Products. “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.”
All market players recorded strong performance during 2014.
- The aggregate business of licensed asset management and fund advisory corporations amounted to $12,920 billion at the end of the year, up 9.6% and once again representing the largest proportion of the combined asset management business.
- Registered institutions recorded an 11.6% increase in their aggregate asset management and other private banking businesses, which reached $4,104 billion.
- Insurance companies reported a 24.2% increase in their assets under management to $452 billion.
Some other findings of the survey are set out below:
- Non-REIT (real estate investment trust) asset management business increased by 11.9% to $12,770 billion, of which $6,856 billion (or 53.7%) was managed in Hong Kong.
- 72.5% of the assets managed in Hong Kong were invested in Asia.
- Other private banking business increased by 12.5% to $3,095 billion.
- Fund advisory business decreased by 3% to $1,611 billion.
- The market capitalisation of SFC-authorized REITs increased by approximately 16.4% to $206 billion.
The FMAS report notes that a robust regulatory regime is fundamental to Hong Kong’s development as an international asset management centre. In this connection, the SFC will continue to work closely with Mainland and overseas regulators as well as stakeholders to maintain an effective and progressive regulatory framework for the benefit of both the financial industry and investing public.
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 587 institutions responded to the survey on a voluntary basis. They included 519 licensed asset management and fund advisory corporations, 47 registered financial institutions and 21 insurance companies (Note 4).
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Notes:
- The term refers to the overall value of assets reported in the sub-sectors of asset management, fund advisory, private banking (broadly categorised as “non-REIT fund management business”) and SFC-authorized REITs.
- Unless stated otherwise, the values given are in Hong Kong dollars.
- The term refers to non-REIT fund management business as defined in Note 1 above.
- Respondents fall into three categories: 1) asset management and fund advisory companies licensed under section 116 or 117 of the Securities and Futures Ordinance (SFO); 2) registered institutions under section 119 of the SFO, which are authorized financial institutions as defined in section 2(1) of the Banking Ordinance (Chapter 155); and 3) insurance companies registered under the Insurance Companies Ordinance (Chapter 41) providing long-term business.
- Please see appendices for some key findings of the report.
