Hong Kong rolls out red carpet to offer city as Asian family offices hub to manage the fortunes and investments of wealthy clans

As many as 50 licensed family offices are operating in the city, two months after the Securities and Futures Commission (SFC) issued the first licensing guidelines for the industry

Most of them are set up as limited partnerships, a business format enabled by a law passed in the local legislature in August

Reading Time:3 minutes

Joseph Chan Ho-lim (left), Under Secretary for Financial Services and the Treasury, and Kwan Chi-man, chairman of the Family Office Association of Hong Kong, attend the opening ceremony of Family Office Association of Hong Kong at the InvestHK office in Admiralty, on Tuesday. Photo: Nora Tam

Published: 2:00pm, 18 Nov 2020Updated: 7:04pm, 18 Nov 2020

Hong Kong, with a record number of multimillionaires among the city’s population, is rolling out the red carpet to attract family offices to use the city as a regional hub for managing the fortunes and investments of wealthy clans.

As many as 50 licensed family offices are operating in the city, two months after the Securities and Futures Commission (SFC) issued the first licensing guidelines for the industry. The local legislature passed a law in August to allow the establishment of limited partnerships, a business format favoured by family offices. Now, a guild has just been set up to represent the interests of the industry.

“We aim to be the voice for the industry, engaging in dialogue with the Hong Kong government and regulators to discuss the regulatory framework for the industry,” said Kwan Chi-man, chairman of the Family Office Association of Hong Kong, in an interview with South China Morning Post. “Switzerland, a leading market in private wealth management industry, has a clear regulatory framework for family office operators. Hong Kong should also develop a clear regulatory framework. If we want to attract family offices to come to Hong Kong, we have to be very specific – what we can do, and what we are capable of and the ecosystem here.”

The move is among the flurry of liberalisations and policies rolled out to better integrate Hong Kong into the Greater Bay Area (GBA), the cluster of 11 cities in southern China that will form the nucleus of one of the world’s fastest-growing economic regions. With a combined population of 70 million people and an economy estimated at US$1.65 trillion, the GBA – comprising nine cities in Guangdong province with Hong Kong and Macau – will be the melting pot where three different currencies, economic and legal systems mix and mingle to lead the next phase of China’s economic growth.

Kwan Chi-man, chairman of the Family Office Association of Hong Kong, during an interview in Sheung Wan on 12 November 2019. Photo: Tory Ho

There are 196 dollar-denominated billionaires in Hong Kong, Guangzhou and Shenzhen, according to Hurun Research Institute. The three cities of the GBA together have the highest concentration of wealthy people in the world.

He Xiangjian, the billionaire who founded the world’s biggest home appliances maker Midea Group and a victim of a botched kidnap attempt, lives in Foshan city in the GBA. Pony Ma Huateng, China’s second-richest man according to Forbes, lives in Hong Kong and has the head office of China’s largest games publisher and social network operator Tencent Holdings in Shenzhen.