Speech by SFST at Hong Kong Investment Funds Association's 40th Anniversary Cocktail reception
Following is the speech by the Secretary for Financial Services and the Treasury, Mr Christopher Hui, at the Hong Kong Investment Funds Association (HKIFA)'s 40th Anniversary Cocktail reception today (April 13):
Sam (Chairman of the HKIFA, Mr Sam Yu), distinguished guests, industry leaders, and friends from the HKIFA,
Good evening. It is a great pleasure of mine to join you this evening to celebrate the 40th Anniversary of the HKIFA. I extend my warmest congratulations to the Association on this significant milestone. For four decades, the HKIFA has been a steadfast pillar of our asset and wealth management industry. You have tirelessly championed professional standards, fostered innovation, facilitated dialogue between the Government, regulators and market participants, and helped position Hong Kong as a premier international financial centre. Your contributions have not only strengthened the industry's foundation but also inspired the next generation of talent and leaders. Tonight, we honour your remarkable journey and look forward to many more years of fruitful collaboration.
Hong Kong's asset and wealth management sector continues to demonstrate remarkable resilience and dynamism. According to the latest annual survey released last year, our assets under management grew by a robust 13 per cent year on year to over HK$35 trillion. This impressive expansion, representing 11 times our GDP (Gross Domestic Product), was powered by net fund inflows that surged 81 per cent to over HK$700 billion. The positive momentum has carried on, with Hong Kong-domiciled SFC (Securities and Futures Commission)-authorised funds recording net inflows of HK$357 billion for last year, a striking 119 per cent year-on-year increase. More than half of these assets come from investors outside the Chinese Mainland and Hong Kong, underscoring our status as Asia's primary asset and wealth management hub for international capital.
We are particularly encouraged by the growth in alternative investments and private equity. Hong Kong is now home to over 650 private equity firms, with capital under management reaching US$231 billion as at the end of last year, ranking second in Asia. We are also reinforcing our position as Asia's largest cross-boundary wealth management centre, with strong expectations that we will soon claim the top spot globally.
To sustain this upward trajectory, the Government and regulators have introduced a series of targeted policy measures that build on our core strengths - an open and internationalised market, the rule of law, a regulatory regime aligned with global standards, a rich pool of professional talent, and the free flow of information and capital. In February last year, the SFC issued a circular clarifying the regulatory requirements for authorising closed-ended funds that invest mainly in private assets. This initiative actively encourages sizeable alternative asset funds, including those focused on private equity, private credit, infrastructure, and other areas with regular income streams, to list in Hong Kong. Complementing this, the Mandatory Provident Fund (MPF) Schemes Authority clarified in May last year that MPF Funds may invest in approved listed private equity funds, further broadening potential access to these funds.
We are also enhancing our preferential tax regimes for funds, single family offices, and carried interest. Key proposals include expanding the tax exemption regime to cover sizeable funds-of-one, as well as a wider range of qualifying investments such as loans, private credit, digital assets, and precious metals. These measures are targeted for implementation from the year of assessment 2025/26, creating an even more competitive and attractive environment for wealth management activities.
Recognising the promising growth potential of the family office and high-net-worth sector, we launched the New Capital Investment Entrant Scheme in March 2024. This scheme aims to attract high-net-worth individuals and fresh capital while enriching our sector. We are delighted that it has already drawn over 3 300 applications with an expected investment value of about HK$99 billion, reflecting strong global confidence in Hong Kong. To further engage the international family office community, we successfully held the fourth edition of the Wealth for Good in Hong Kong Summit last month, bringing together family offices from around the world to exchange ideas on legacy building, innovation, and sustainable wealth growth.
Continued development of our market infrastructure remains a key competitive advantage. Our fund infrastructure was advanced through the HKEX (Hong Kong Exchanges and Clearing Limited)'s Integrated Fund Platform. With the Fund Repository launched in December 2024 and the Order Routing Service introduced in July last year, the platform is set to deliver even greater efficiency, lower transaction costs, and broader distribution reach when additional services covering fund sales procedures are rolled out this year.
In parallel, we continue to promote the REIT (real estate investment trust) market through regulatory enhancements, investor base expansion, stamp duty waivers on REIT unit transfers, and forthcoming legislative amendments to facilitate privatisation or restructuring of REITs, as well as stamp duty waivers for transferring non-residential properties into REITs seeking listing. Subsidies are also available for eligible open-ended fund companies and REITs to cover a portion of professional service expenses, lowering entry barriers and encouraging more funds to establish or re-domicile in Hong Kong.
All these measures form part of our multipronged strategy to sharpen Hong Kong's competitive edge and cement our position as a leading international asset and wealth management centre. Yet, beyond policies and statistics, what truly sets Hong Kong apart is our shared vision - a vision of a dynamic, innovative, and inclusive financial ecosystem where capital meets opportunity, where talent thrives, and where wealth creation contributes to broader economic and social good. The HKIFA has been an invaluable partner in realising this vision, and I am very confident that, working hand in hand under Sam's leadership, we will achieve even greater heights in the years ahead.
Just now at the beginning of the stage, Sam mentioned the HKIFA's 40 years of excellence. In Chinese, if you are well-versed in the Confucius teaching, there's a saying of "When you turn 40, you have no doubts". That means that you are more determined in the direction that you are taking and in the work that you are doing. I am sure that now with the HKIFA turning 40, you are getting more mature, more determined. We are looking forward to working together with the HKIFA to continue this process of making continued prosperity for the industry, and also at the same time for the future of Hong Kong as a premier Asia asset and also wealth management hub. Thank you.
The Secretary for Financial Services and the Treasury, Mr Christopher Hui, Photo source: reference image
