Total AUM may still grow amidst rise in China’s wealth: PwC, AIMA

Between 2009 and 2020, China’s wealth rose twelvefold.

The total assets under management (AUM) in Hong Kong, as the gateway to China, may still increase due to China’s wealth, PwC and the Alternative Investment Management Association (AIMA) said.

In a joint statement, Lisa Tsui, partner for asset, and wealth management of PwC, said billionaire wealth in China grew twelve-fold between 2009 and 2020. 

However, Tsui said the city is lagging behind the New York metropolitan area and London in terms of assets under management (AUM). 

“This significant shift in global wealth is not yet reflected in the growth of Hong Kong’s alternative investments sector,” she added.

With these opportunities, Hong Kong’s stakeholders were also urged to collaborate on how to boost Hong Kong’s strengths, which include rule of law, tax system, regulatory environment, talent pool, capital markets, and proximity to China.

“Now is the time for all stakeholders with skin in the game to collaborate on how to strengthen Hong Kong’s strategic blueprint to attract – and retain – alternative asset managers to ensure Hong Kong continues to be a leading international financial centre in Asia,” said Phillip Meyer, chairman of the Executive Committee in AIMA.

The research also indicated that Hong Kong’s gateway role for Mainland China will be necessary to allow global institutions to access investments in China.

“In this role, Hong Kong is uniquely positioned to benefit from international asset managers and institutions interested in allocating funds to investments in Mainland China, as well as Chinese asset managers and owners looking to gain international exposure,” read the report.

The study also showed that the majority of fund managers identified the “rule of law” as the most important reason they picked Hong Kong as their location.

With Hong Kong’s tax policies continuing to retain alternative investment, it was advised that policymakers should continue this approach to level up their working relationships with market participants.

Currently, Hong Kong “manages the lion’s share of alternative assets within the Asia Pacific, with more than 740 alternative asset managers having established offices there.”