Hong Kong

Family offices in Hong Kong have grown in significance for the whole financial services sector, not only as a result of the enormous asset under management ("AUM") that these family offices possess, but also as a sign of the financial center's overall wealth management skills.

Family offices have grown significantly in recent years. As of July 2019, there were around 7,300 single family offices globally, which is an increase of 38% from the end of 2017. In Asia, it has had growth of 44% within that total during the same time span, the highest rate in the whole globe.

Hong Kong may take advantage of Asia's rapid economic expansion to expand into a regional family office business centre.

When it comes to establishing family offices, Hong Kong is an excellent destination to consider. This is especially important if you are considering to take advantage of the city's proximity to Greater China.

Hong Kong's financial markets are developed and sophisticated, making it possible to meet the unique investment requirements of more affluent households.

Due to its close links to the Mainland, the city has traditionally served as a hub for inward and outbound investment.

Moreover, Hong Kong's strong professional services and plentiful pool of talented workers may provide first-rate assistance to the operations of family offices.

Hong Kong is ideally positioned to meet the diverse investment demands of family offices since the city provides a wide range of green and alternative investment possibilities that are popular with family offices.

DID YOU KNOW: In Hong Kong, although there is no available figure regarding the number of family offices operating in Hong Kong, the wealth of total UHNW families in the city is estimated at USD 1,179 billion.

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Hong Kong Is The Family Office Hub Of North Asia

hongkongbg8Concentration of family wealth in Hong Kong

A study in 2018 showed that Hong Kong had the highest density of UHNW individuals (i.e. with wealth above USD 30m) among all countries and areas in the world, with the second largest population of UHNW individuals among cities around the world (only behind New York)

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hongkongbg9Strong growth of family offices in Asia

As of 2019, about 39% of the world's wealth came from Asia, and about 28% of the world's ultra-high-net-worth individuals lived there. 13 In contrast, only about 18% of all family offices were located in Asia (which is 21 percentage points and 10 percentage points lower than total wealth and total number of UHNW individuals respectively).

According to a report by Forbes, these differences are mostly due to the fact that many of these UHNW people are still in their first generation, and waves of intergenerational wealth transfer can be expected. Market practitioners think that these waves could lead to a high potential growth in demand for family offices in Asia.

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hongkongbg12Development of the Guangdong-Hong Kong-Macao Greater Bay Area (“GBA”)

The Outline Development Plan for the Guangdong–Hong Kong–Macao Greater Bay Area, which came out in February 2019, has a number of policies that aim to make it easier for financial services to cross borders. 

After the Leading Group for the Development of the Guangdong-Hong Kong-Macao Greater Bay Area met in November 2019, the Central Hong Kong Government took a number of steps, such as "exploring the establishment of a cross-boundary wealth management scheme" in the GBA.

As one of the most successful and wealthy places on the Mainland, the GBA was home to 19,300 of the 84,000 UHNW families in the country (23% of the total). As the need for cross-border asset allocation and policy breakthroughs grows in the region, market participants expect that Hong Kong's UHNW families will want to use the services of family offices a lot.

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hongkongbg13Dynamic investment opportunities reeling in family offices

Mainland China is still one of the fastest-growing economies in the world, and many families from Europe, North America, and the Middle East want to participate in this growth. This means that Hong Kong will continue to act as a way for foreign investors to get into the market. Hong Kong is the largest private equity (PE) market outside of Mainland China and the largest hedge fund hub in Asia.

This shows that investors see opportunities to make money by investing directly in start-ups through their businesses in Hong Kong. With a steady flow of investment projects, family offices looking for long-term investment opportunities would be drawn to the area.

The fast growth of UHNW families in the Mainland gives Hong Kong a lot of chances to serve this family office ecosystem, which has a lot of room to grow and could become the best place for these families to manage and diversify their capital.

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