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| Thursday, 5 December 2013, 20:15 HKT/SGT | |
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Source: HKPEFA | |
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HONG KONG, Dec 5, 2013 - (ACN Newswire) - The Hong Kong Private Equity Finance Association ("HKPEFA"), a self-governing non-profit organization, principally serving finance, legal and other practitioners in the private equity ("PE") and venture capital ("VC") industry, held its inauguration ceremony today.
 | | Hong Kong Private Equity Finance Association Calls for Actions to drive the Transformation of Hong Kong into an Asset Management Hub |
In respect to the inauguration of HKPEFA, the Honorable John C Tsang, GBM, JP, Financial Secretary of the Hong Kong SAR said "The field of PE and VC is dynamic and challenging. With the continued economic reform in China and other parts of Asia, HKPEFA and its members are well placed to seize the opportunities in this region and beyond."
"While Hong Kong has come a long way in developing its PE and VC industries, HKPEFA strongly believes that the city has much potential in transforming into an even greater asset management hub for the region; HKPEFA is established to take on the mission to drive the necessary changes to foster industry development," said Simon Ho, Chairman of HKPEFA.
To mark the inauguration of HKPEFA, the Association released findings from two survey reports, one conducted by HKPEFA and one by PricewaterhouseCoopers ("PWC"), with analysis of the current position of Hong Kong in the global asset management industry and recommendations for transforming the city into a major asset management hub.
"As shown in our latest survey, a majority of industry practitioners do believe we are losing our competitive advantage while our competitors are raising their game. It is time the government and professionals in the industry work hand-in-hand to improve the operating environment and attract more fund managers to select Hong Kong as their operations platform. The primary objective is to realize the many opportunities presented by Mainland China and the Asian region."
A summary of the HKPEFA survey findings is as follows:
-- 79 percent of respondents indicated, with outbound investments from Mainland China growing, they believe Hong Kong is the most suitable place for PE or VC firms to build their presence if they are going for outbound investments, followed by the choices of a special economic zone or free trade zone in Mainland China (13 percent), Shanghai (6 percent) and Singapore (2 percent)
-- 65 percent think Hong Kong has not done enough in promoting its importance for China outbound investments and is facing strong competition from other regions or cities
-- Facing competitions from foreign markets such as Ireland and Singapore which are upgrading their human capital in fund administration and research capabilities to attract funds to domicile locally, 71 percent of respondents think Hong Kong is losing its competitive edge and the government can work more closely with the industry to develop human capital
-- "Favourable tax regime" is ranked first as the most important credential for making a fund hub successful, followed closely by "friendliness and clarity of regulatory frame-work", then "cost of doing business" and "availability of financial intermediaries", while "availability of service providers" and "geographic location" equally ranked as the least important among these key factors
-- "Tax favourable environment" is ranked first as the most important factors in attracting international funds and/or China domestic funds to launch in Hong Kong, followed by "clear regulations and guidelines", "the availability of professionals with strong technicality", "support of financial intermediaries" and "professional service support" in descending order
-- Half of the group of respondents think Hong Kong's government could be better in providing the necessary level of policies support for the PE and VC industry
-- In response to the government's announcement in its 2013/14 budget to provide profits tax exemption for offshore funds, 61percent of the group think the budget announcement is encouraging to their firms, but the rules are unclear and no further guidance has been given
Another survey conducted by PwC studied the current standing of Hong Kong in the global asset management industry and gave recommendations on enhancing its status. Currently, out of over 65,000 global funds, only 300 are domiciled in Hong Kong. Such statistics do not cover private equity funds and other unregulated funds . So far no private equity funds are set up domiciled in Hong Kong . In order to transform Hong Kong into a leading asset management hub, the following directions are recommended by the PwC survey report:
-- Encourage Hong Kong managers to use Hong Kong products
-- Incentivise global managers to domicile funds and manage assets in Hong Kong
-- Leverage on political, geographic and cultural proximity with Mainland China
In particular, the industry is advised to take the following specific measures to bring forth changes:
-- Establish more efficient vehicles and structures
-- Maintain regulatory distinction between regulated and non-regulated funds
-- Bring tax certainty and consistency across all fund types
Florence Yip, Partner, Greater China PE Tax Leader of PwC said, "Hong Kong's asset management industry currently ranks fourth globally*. Our talent pool, operational platform, fund distribution channel are relatively developed and may be considered as our competitive advantages. Nevertheless, in order to further enhance Hong Kong's competitiveness, actions are required, in particular in our existing regulatory environment and taxation policies, for us to break through the status quo and thrive."
*Source: Global Financial Centers Index 12, LongFinance
Contact:
Strategic Financial Relations Limited
Heidi So, +852 2864 4826, heidi.so@sprg.com.hk
Cindy Lung, +852 2864 4867, cindy.lung@sprg.com.hk
Denise Siu, +852 2114 4913, denise.siu@sprg.com.hk
Topic: Press release summary
Source: HKPEFA
Sectors: Daily Finance, Daily News
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