Global family offices flock to Hong Kong as property, stock market and Greater Bay Area opportunities act as magnet – South China Morning Post

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The removal of property curbs, a stock market rebound and growing opportunities in the Greater Bay Area are attracting an increasing number of family offices to Hong Kong, according to industry players.

“Many families have been very positive about the removal of restrictions on real estate because that is a very popular asset class for family [office] investments,” said Jessica Cutrera, chair of the Family Office Association of Hong Kong. “It is one more sign that the Hong Kong government is committed to developing family offices.”

The policies enhance the ability of family offices to continue to invest in Hong Kong’s real estate, added Cutrera, who is also the president at Leo Wealth, which offers advisory services to global multifamily offices.

The Hong Kong government removed property cooling measures, including the extra stamp duty, at the end of February, while the Hong Kong Monetary Authority simultaneously relaxed decade-old stringent mortgage policies.

(From left) Angie Chia, executive director of Hong Kong Academy for Wealth Legacy; Jessica Cutrera, chair of Family Office Association of Hong Kong (FOAHK); Jim Kwok, vice-chair of FOAHK and Grant Ko, director of FOAHK, attend a ceremony at the Financial Services Development Council’s office in Hong Kong on Wednesday. Photo: Enoch Yiu

Apart from the easing of property curbs, Hong Kong has offered a range of incentives to attract international family offices, including tax breaks in May last year and an investment-based migration scheme in March this year.

These initiatives came after Chief Executive John Lee Ka-chiu set a target to attract at least 200 family offices by 2025, on top of the nearly 400 firms already here.

Cutrera is positive that Hong Kong could reach the target, noting that many family offices in Southeast Asia, the Middle East and elsewhere are interested in the city.

“For families that are interested in doing business in China, Hong Kong is a natural place for them,” she said. “The families that are interested in capital markets and those that are considering an IPO [initial public offering], they will consider Hong Kong because that is the [city’s] real strength.”

On Wednesday, the association and five Hong Kong-based family offices donated HK$1.25 million (US$160,250) to the Chinese University of Hong Kong Kong, Centre for Family Business, to support a study of best practice framework for family offices.

Marshall Jen, executive director of the centre, said Hong Kong family offices will continue to grow along with the opportunities arising from the development of the Greater Bay Area, which comprises Hong Kong, Macau and nine mainland Chinese cities in southern Guangdong province.

The recent stock market recovery has helped family offices’ confidence, said Jaime Chou, chief investment officer of GLy Capital Management, a Hong Kong-based investment management company.

The China Securities Regulatory Commission, the country’s securities watchdog, last month unveiled five measures to revive confidence in the nation’s capital markets, which has helped the benchmark Hang Seng Index gain almost 8 per cent over the past month.

“We have seen a [revival in] investment sentiment in the domestic stock market,” Chou said. “The Hong Kong government has put a lot of effort into the city’s capital market, which in turn will help to create an ecosystem for the development of family offices.”

Jacky Leung, founder and chairman of the Royal Family Office, said they were focused on long-term investments.

“Hong Kong’s family offices have reported 30 per cent annual growth in assets under management in recent years,” Leung said. “If the trend continues for the next five to 10 years, some consultants expect Hong Kong’s wealth management industry will become bigger than Switzerland’s.”

Li Man-on, co-founder and director of Alfo Capital and the fifth generation of the Li family which co-founded Bank of East Asia, said Hong Kong’s strength lies in its resilience.

“Hong Kong has experienced financial crises from time to time, but we have seen Hong Kong always comes back,” Li said.

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