Allow private equity funds to operate as limited partnerships, expert says

The Hong Kong government should consider introducing a change in the law to allow private equity funds to be set up as limited partnerships, so as to further enhance the city's fund industry, a member of a government advisory body says.

Florence Yip Chiu Kwai-fong, financial services tax leader of PricewaterhouseCoopers, sits on the Financial Services Development Council (FSDC), which was appointed by Chief Executive Leung Chun-ying in January.

The FSDC released its first set of reports last week on what can be done to enhance the city's competitiveness.

Yip, who focuses her work in the council on finding ways to promote the local fund industry, said many overseas private equity funds are set up in the form of limited partnerships, a structure that is not available in Hong Kong.

"If the Hong Kong government would consider introducing a change in the law to allow private equity funds or certain non-retail fund products to be set up as limited partnerships, it would attract more international fund houses to set up such funds here and hence promote the fund industry in Hong Kong," she said in an interview.

Yip said the council has submitted this suggestion to the government and hopes consultation on it will be undertaken soon.