Already a popular family office hub due to its robust financial infrastructure, low taxation and free market economy, Hong Kong is eyeing the next wave of new family offices. Asia is projected to witness a doubling of assets under management (AUM) and a 60% increase in revenues by 2025 compared to 2021 levels, with Hong Kong being the prime destination for wealth management business.
The family offices landscape has been developing rapidly in Asia in the last decade. Following the recent establishment of the HKAWL, which will double as an open platform for family offices, Hong Kong is further sweetening the deal for wealth owners worldwide.
"As part of a family office that has been rooted in Hong Kong for more than 50 years, I am delighted to offer my support and insights to the HKAWL. Our goal is to educate the next generation of family business leaders, equip them with the knowledge and skills necessary to effectively manage their family offices and build upon the legacy we have established.＂said Adrian Cheng, Chairman of HKAWL and internationally renowned business leader.
Led by industry experts and tycoons such as Cheng, who is also the CEO of Hong Kong conglomerate New World Development and the Founding Chairman of HKAWL, HKAWL serves as a significant step towards attracting global family offices to Hong Kong. It aims to offer comprehensive support, insights and knowledge exchange on wealth management to both draw global family offices and wealth managers to Hong Kong.
Hong Kong currently boasts a massive asset and wealth management industry that is worth US$3.9 trillion. In 2022, family offices and private trusts contributed 17% of the private banking and private wealth management business in Hong Kong, roughly HK$1,520 billion, or US$195 billion. The city is also projected to be the largest booking centre by 2025.
Hong Kong's four Key Advantages as the Premier Family Office Hub
At the recent launch of the HKAWL, Cheng shared his views on the timely launch of the Academy and the major draws of Hong Kong as a premier family office hub. He said that Hong Kong offers four key comparative advantages over its peers for family offices. These include its status as the dominant gateway to the massive Mainland market and the global hub for offshore renminbi business. Hong Kong also provides a supportive regulatory environment underpinned by a well-established legal system with a favorable tax regime. As an international financial centre, it is home to the world's leading banks, and a large asset management market with diverse investment products. Additionally, the city is establishing itself as a hub for emerging financial trends that cater to the diversified needs of family offices, such as green and sustainable finance and the art and collectibles market.
Key Pillars of HKAWL Going Forward
Christopher Hui, Secretary for Financial Services and the Treasury, also shared the roadmap of HKAWL at its launch event, emphasising the importance of offering innovative events and investment opportunities that speak to next-generation wealth owners. They include:
- Flagship Summit: Hong Kong will host the second "Wealth for Good in Hong Kong Summit" themed "Growing with Certainty Amid Growing Uncertainty" in late March next year. It will be a flagship summit organised by the Hong Kong Government to engage and collaborate with the decision makers and professional teams of family offices around the globe, showcasing Hong Kong's unique opportunities.
- Introducing a new Capital Investment Entrant Scheme: Hong Kong will implement a new Capital Investment Entrant Scheme to allow eligible investors who make investments of HK$30 million or above in assets such as stocks, funds, bonds, etc. (excluding real estate) to apply for entry into Hong Kong.
- Philanthropic and Impact Investing: HKAWL will help nurture and foster strategic philanthropic initiatives and impactful giving, and promote investments with social and environmental benefits.
- Art storage facilities: new art storage facilities will be built at the Hong Kong International Airport for collectors and investors, including family offices that deploy their wealth in art. It will leverage Hong Kong's position as the largest art market and auction centre in Asia, further promoting Hong Kong as a premier destination for art enthusiasts and family offices to explore the inclusion of art in investment portfolios.
On his vision for the HKAWL, Cheng said: "It is fostering an inclusive and trusted, yet private environment for families to preserve their legacy across generations, thereby promoting the industry's sustainable growth. We therefore welcome new ideas from all stakeholders including notably other family offices."
The establishment of HKAWL is one of the eight initiatives of the Hong Kong Government that aims at developing a vibrant ecosystem for global family offices and asset owners. In addition to the tax exemption for family-owned investment holding vehicles managed by single family offices in Hong Kong, the Government and regulators have implemented a number of market-facilitating initiatives, including streamlining the suitability assessment for sophisticated professional investors, and the launch of a Network of Family Office Service Providers under Invest Hong Kong.
HKAWL is joined by five of Asia's richest families, including Chairman Adrian Cheng from the Cheng Family, one of the most prominent families in Asia; board member Daryl Ng; and advisory board members Philip Lawrence Kadoorie, Adam Kwok, and Poman Lo, all from the top 50 of Asia's richest families.
"Looking forward, Asia is the key battleground for wealth management firms. With Financial Services Development Council and HKAWL, we'll be able comprehensively strengthen our propositions to help families manage their wealth legacies." Cheng added.
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