The Monetary Authority may have spent US$500 million to buy office properties in London and Paris in an attempt to enhance the investment returns of the local reserve.
HKMA chief executive Norman Chan Tak-lam indicated in January that the Exchange Fund would invest in overseas property markets to boost its investment returns, but he gave no details.
The Times reported yesterday, without quoting sources, that the Exchange Fund purchased its first building in London's City financial district this year, while JP Morgan Asset Management's GBP260 million (HK$3.3 billon) acquisition of 10 Aldermanbury Square was made on behalf of HKMA's investment portfolio.
'We do not comment on the specifics of the investment operations of the Exchange Fund because of the market-sensitive nature of the information,' an HKMA spokesman said.
The HK$2.43 trillion Exchange Fund, the city's reserve comprising the government fiscal surplus to support the Hong Kong dollar's peg to the US dollar, is managed by the HKMA to invest in bonds, Hong Kong and overseas stocks and foreign currencies.
Since the fund adopted a conservative approach, legislators have complained the returns are too low. Chan has admitted a need to seek better investment opportunities.
'HKMA has started to diversify its investments by way of overseas properties and private equities to improve returns,' Chan said in a Legislative Council monthly meeting in January. He said the fund would also invest in mainland stock and bond markets via the qualified foreign institutional investor (QFII) scheme.
