Last year, the asset management scale in Hong Kong grew by 13% year-on-year to over HKD 35 trillion, with a net inflow of over HKD 700 billion

The Secretary for Financial Services and the Treasury, Hui Cheng-yu, stated during a speech at the Hong Kong Investment Funds Association gala that, according to the latest annual survey released last year, benefiting from a net capital inflow of over HKD 700 billion, which increased by 81% year-on-year, the asset management scale in Hong Kong experienced a strong year-on-year growth of 13%, totaling over HKD 35 trillion. This increase is equivalent to 11 times the local Gross Domestic Product (GDP), and this positive momentum has continued to date. Last year, the net capital inflow recorded by the Securities and Futures Commission (SFC) approved funds registered in Hong Kong reached HKD 357 billion, a significant year-on-year increase of 1.19 times, with more than half of the funds coming from investors outside mainland China and Hong Kong, highlighting Hong Kong's position as a major asset and wealth management center for international capital in Asia. Last Year, Hong Kong's Alternative Investments and Private Equity Ranked Second in Asia Hui Cheng-yu continued to express encouragement regarding the growth of alternative investments and private equity, noting that Hong Kong currently has over 650 private equity firms, with total assets under management reaching USD 231 billion by the end of last year, ranking second in Asia. This also reinforces Hong Kong's position as the largest cross-border wealth management center in Asia, with expectations that Hong Kong's ranking will soon rise to first in the world. Authorities Have Launched a Series of Targeted Measures Hui further revealed that to maintain the upward momentum and advantages of the local fund market, the government and regulatory bodies have introduced a series of targeted policy measures. This includes a circular issued by the SFC in February last year, clarifying the regulatory requirements for the approval of closed-end funds primarily investing in private assets. As a supporting measure, the Mandatory Provident Fund Schemes Authority clarified in May last year that MPF funds can invest in approved and listed private equity funds, further expanding the potential investment channels for these funds. Additionally, efforts are underway to optimize the tax incentive system applicable to funds, single-family offices, and associated interests. Hui emphasized that the authorities continue to enhance Hong Kong's competitive advantages through optimizing regulations, expanding the investor base, and exempting stamp duty on the transfer of real estate investment trust units, thereby consolidating its position as a leading international asset and wealth management center