HK urged to chase long-term 'patient capital'
Hong Kong should go after money that stays put, not cash that flees at the first wobble, the Financial Services Development Council said on Wednesday, in a push to tighten the city's hold as Asia's wealth-management hub. The council has set out ways in a new report to attract this “patient capital” from pension funds and insurers at home, on the mainland and overseas. The council's Vice-Chairman,…
The Financial Services Development Council of Hong Kong is urging the city to focus on attracting "patient capital" rather than fleeting funds, in order to cement Hong Kong's position as a leading wealth-management hub in Asia. In a new report, the council outlined strategies to entice pension funds, insurers, and other investors with a longer investment horizon.
According to the council's vice-chairwoman, Ding Chen, the ultimate goal is to transform Hong Kong into a destination where capital not only flows in and out but also remains invested and reinvested over extended periods. The report emphasizes the need for a broader array of investment products, such as bonds and diversified stocks, accompanied by more stringent risk controls.
Moreover, it advocates for enhanced cross-border channels, particularly in the realms of pensions and insurance. Rocky Tung, the council's executive director, highlighted that this "sticky" capital could serve as a stabilizing force during market fluctuations, fostering new financial products and long-term growth. Tung pointed out that there is a constant influx and outflow of investments in various markets, and investors often exit the market quickly if they perceive any shortcomings.
This swift turnover contributes to market turbulence and amplifies economic cycles. In light of this, the report advocates for patient capital, which embodies a long-term perspective and acts as a stabilizing force. The report revealed that mainland insurers held an impressive 41.3 trillion yuan in assets by the end of the previous year, but only a paltry 5.4 percent of that was invested abroad, significantly below the permitted 15 percent.
In 2024, mainland pension savings were valued at 15.66 trillion yuan. The report suggests that as populations age, the demand for diversified cross-border investments and a more balanced alignment between assets and long-term liabilities could unleash substantial growth prospects for Hong Kong's patient capital sector.
Written by urgent.news from RTHK News - Finance's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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