Hong Kong fund houses bypass brokers as fund size hits HK$16 trillion

PUBLISHED : Wednesday, 09 July, 2014, 5:19am
UPDATED : Wednesday, 09 July, 2014, 5:45am

The number of fund houses in Hong Kong surpassed the number of brokerage firms in May as the size of locally managed funds hit a record HK$16 trillion, data released yesterday by the Securities and Futures Commission (SFC) revealed.

SFC deputy chief executive Alexa Lam Cheung said the strong growth had been driven by international fund companies' expansion in the city as a stepping stone to capturing growing business from the mainland and the rest of Asia.

"This shows the attractiveness of Hong Kong as an assetmanagement centre in Asia," she said.

But she played down concerns that the figures also showed that brokers, who constantly complain the government has not helped them expand, are going through a tough time.

"The brokerage industry also had record growth rate, although it grew at a slower rate than the fund industry, which has a lower comparison base," Lam said.

"In terms of [the] number of people, the brokers are still the largest employers in the city as they are more labour-intensive.

"As such, they are still very important."

At the end of May, the number of licensed fund houses stood at 978, up 3 per cent from the end of last year, compared with 969 licensed securities brokerages, up 1.25 per cent. But the securities firms employed 27,723 people, almost four times the 7,409 working for fund houses.

Assets under management of the local fund industry rose 27.2 per cent last year, following a 39.3 per cent gain in 2012.

The SFC and the China Securities Regulatory Commission reached a consensus in December on the cross-selling of fund products but no date has been set for both sides to sign an agreement. Lam said the date would be determined by authorities in Beijing.

Under the scheme, locally domiciled funds will be allowed to be sold on the mainland.

At the end of March, there were 469 funds domiciled in Hong Kong, up 50 per cent year on year, with US$97.6 billion of assets under management, up 74 per cent.