Advertisement
Banking & finance
Opinion
SCMP Editorial
SCMP Editorial

Editorial | Investment body adds to coffers and clarity on Hong Kong’s long-term future

The Hong Kong Investment Corporation has made good progress on fulfilling a mandate that goes beyond just generating financial returns

Reading Time:2 minutes
Why you can trust SCMP
Hong Kong’s financial district is seen at sunset on November 17. Photo: Jelly Tse
SCMP Editorial
The Hong Kong government’s new investment outfit has had a good start. The Hong Kong Investment Corporation (HKIC) earned HK$2.34 billion (US$300.7 million) in investment income and posted HK$2.25 billion in operating income in its first year of operation. It could have made more but chose a more gradual approach, deploying less than one-fifth of HK$62 billion in seed capital.

Its chairman, Financial Secretary Paul Chan Mo-po, was rather happy with its first report card. The results seem to have vindicated the government’s decision to set up the HKIC. Let us see if it can sustain the performance in the years ahead.

The HKIC has been compared with Temasek, but the two are rather different. For one, Singapore’s sovereign wealth fund is vastly bigger in terms of assets under management. The two also have different investment mandates. Temasek seeks long-term profitability with a global reach to benefit Singaporeans over generations.

Advertisement
By contrast, the HKIC aims to promote local productivity and competitiveness, not just profitability. That’s why it also invests in tech start-ups such as those in artificial intelligence and pharmaceuticals in Hong Kong and on the mainland. More than 10 such companies have either filed or planned to file for listing in Hong Kong. Two are already listed. As Chan has explained, the HKIC is the government’s “patient capital investment arm” with a dual mandate of enhancing Hong Kong’s economic vitality and long-term competitiveness, not only financial returns.

At the end of October, the HKIC had invested in more than 150 projects, with 62 per cent of deployed capital going to the mainland and 34 per cent to Hong Kong. Of the projects, 71 per cent were in hi-tech, 13 per cent in biotech and 11 per cent in renewables and green technology.

Advertisement

CEO Clara Chan Ka-chai said that as an institutional investment unit, the HKIC needed to compete in international markets while serving the goals of national development. To diversify its investment talent, it has appointed 10 asset managers spanning venture capital, private equity, private credit and hedge funds.

Advertisement
Select Voice
Choose your listening speed
Get through articles 2x faster
1.25x
250 WPM
Slow
Average
Fast
1.25x