HK v Singapore v Switzerland goes on in the family office space

Data presented at the Hong Kong Investment Funds Association annual conference has signalled the battle to attract domiciliation of family offices is as intense as ever between Hong Kong, Singapore and Switzerland.

The South China Morning Post reports that Hong Kong has attracted more single family offices than Singapore, citing the impact of tax incentives and an investment-linked migration programme. It suggests that the Special Administrative Region has more than 2,700 such entities as of end 2023, against some 1,400 in Singapore based on Monetary Authority of Singapore data.

Hong Kong had set a target in 2022 of attracting 200 family offices by 2025, with government department InvestHK suggesting some 64 had so far committed, with another 130 indicating plans to do so.

Also citing data linked to the conference, The Standard cites deputy financial secretary Michael Wong Wai-lun noting in his keynote that the jurisdiction has seen a 24% growth in family offices, hedge fund managers and private equity fund managers over the past three years. He reportely also stressed the figure of 2,700 single family offices now operating there.

The upbeat assessment from Asia contrasts with that of UBS chief executive Sergio Ermotti, who last week warned in a lecture at the University of Lucerne that HK, Singapore and the US were competing hard for business in the offshore wealth management space.

Wong added that HK has seen bank deposits rise 2% in the first four months of 2024, up 2% compared to last year. HK Securities and Futures Commission data suggests inflows to local funds were higher in the period compared to the previous year. And the HK Monetary Authority is looking to upgrade the Wealth Management Connect to attract cash from mainland Chinese households.

China Link

Emphasising the upsides of the links to mainland China is also the focus of the latest report published jointly by the HK Investment Funds Assocation (HKIFA) and KPMG to coincide with the annual conference.

Vision 2030: The future of Hong Kong’s fund management industry, is based on a series of in-depth interviews with senior industry executives, including representatives from the Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC), as well as a survey of HKIFA members.

HKIFA says: "Many of the CEOs interviewed for the report were strongly of the view that the Chinese Mainland market will continue to be the biggest growth driver for Hong Kong’s asset managers as the growing numbers of high-net-worth individuals (HNWI) and middle-class population are expected to drive the demand for investment products. Given Hong Kong’s longstanding experience in managing assets and its innovative investment products, the city is ideally positioned to serve the needs of this huge and growing market."

Elisa Ng, chairman, Hong Kong Investment Funds Association, added: "While the Chinese Mainland is likely to remain the most significant market, there are also many other areas of emerging opportunities. Across the Asia Pacific, a growing middle class and more sophisticated investor base is driving increasing demand for investment products. In addition, the shifting demographics across the region will require solutions to the retirement needs of an ageing population."

"While the opportunities are considerable, Hong Kong must remain best-in-class in its regulatory regime and tax incentives so to retain its status as Asia’s leading asset management hub. This will ensure that Hong Kong continues to be the preferred hub for setting up an asset management business and that the city can continue to position itself as the preferred jurisdiction to manage assets in the region."