Wealthy families and financial service providers in Hong Kong are calling for urgent regulatory reforms to help the city’s family office sector compete more effectively with global rivals for managing ultra-high-net-worth assets.
The Hong Kong Special Administrative Region needs a solid regulatory framework to build trust and attract wealthy families from mainland China and overseas to establish wealth management offices in the city, according to Mahesh Harilela, family council convenor of the Harilela Group.
Harilela, whose family represents one of Hong Kong’s most prominent Indian business dynasties with a century-long track record in trade and hospitality, said creating a regulatory framework aligned with family offices would build on Hong Kong’s core competencies in investment management.
Hong Kong currently manages around $1.3 trillion in offshore assets through more than 2,700 family offices, matching Singapore’s asset levels despite having significantly more offices than Singapore’s fewer than 2,000.
Gregg Li, an honorary member of the Center for Family Business at the Chinese University of Hong Kong, said the sector urgently requires regulatory clarity, institutional support, talent development, professionalism and a strong brand identity to compete with other global family office hubs.
Li, who also serves as an ambassador and researcher at the University of Hong Kong’s Laboratory for Space Research, noted that family offices in the city are seeking investment opportunities in technology and innovation industries, particularly where commercialization prospects are strong in the Greater Bay Area.
The SAR government has allocated HK$1 billion ($128 million) for AI and high-tech project commercialization in the 2024-2025 fiscal year.
Li said Hong Kong has been a trusted broker because its professionalism makes the city a good bridge between mainland Chinese and Western standards in traditional business trade sectors, adding that the city is positioned to become a hub for data transactions and high-tech project financing as the big data and space economy expand.
Despite the establishment of Family Office HK under InvestHK in June 2021 to promote the city as a family office hub, recent research by the Chinese University of Hong Kong Family Business Center found the sector is at a crossroads.
The study, co-authored by Marshall Jen, director of the CUHK Center for Family Business, and Li, identified the need for more structured training regimes and ecosystem development to enhance industry professionalism – key factors for Hong Kong’s competitiveness as a family office destination.
The research recommended a robust ecosystem supported by public-private partnerships to improve service quality and stakeholder collaboration as the sector seeks to mature and support growth in asset management and diversified high-tech investment portfolios.
FamilyOfficeNewsAsia.com
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