As a global asset management centre, Hong Kong is behind many of the the fast and promising developments in the financial market of China. To private equity funds seeking opportunities in Mainland China, Hong Kong is the best place to launch because they can enter the mainland market by positioning projects and investments within the city. Hong Kong is also the biggest RMB offshore trading centre, which benefits from a growing pool of liquidity. At the same time, the international characteristic and reputation of the city attracts investors from all around the world.
The Hong Kong wealth management market is attractive not only to local developers but foreign institutions, as it holds substantial wealth resources. Core HNWIs – also called core millionaires – consisting of two wealth bands: mid-tier millionaires and lower-tier millionaires. Core millionaires are the base of the wealth pyramid, with 98.6% of Hong Kong HNWIs being identified as such. Core HNWIs collectively accounted for 60.9% of Hong Kong HNWI wealth in 2014, which is well below the global average of 70%.
Much of the growth in Hong Kong’s wealth management market and private banking sector has been driven by the country’s volume of High Net Worth Individuals (HNWIs) and Ultra-HNWIs during the last decade. Private Banks and institutions will look to reinforce and centralise their operations over the forecast period, as well as allocate more resources to better understand their client base and provide higher levels of service.