HKMA to Select Managers for New Growth Portfolio by H2 – Report

Source: Regulation Asia Editors, Regulation Asia 2020-06-16

The sovereign growth portfolio will invest in Hong Kong-specific projects, aimed at lifting the city’s competitiveness in financial services, commerce, aviation, logistics and innovation.

The HKMA (Hong Kong Monetary Authority) will begin selecting private equity funds that will help manage a new HKD 22 billion (USD 2.8 billion) investment vehicle by the second half of the year, reports the SCMP.

The planned formation of the new fund – the Hong Kong Growth Portfolio – was unveiled by Financial Secretary Paul Chan Mo-po in his February budget speech, in anticipation that Hong Kong’s economy will slow in the next four years.

Similar to Singapore’s sovereign fund Temasek, the new Portfolio will invest in Hong Kong-specific projects, aimed at lifting the city’s competitiveness in financial services, commerce, aviation, logistics and innovation. In its initial mandate, the Portfolio will not invest in real estate companies or projects.

“Instead of having the government evaluating projects one by one, we will partner with private equity funds as general partners and we will be a limited partner,” Chan said in an interview with the SCMP. “The selection process will be open and transparent.”

“We will set the direction of investments, which is about more than making a return. It has to help invest in Hong Kong’s economic future.”

This will be the first time the Hong Kong government has formed a private equity fund within its reserve system.

The Hong Kong Growth Portfolio will be formed using 10 percent of the government’s HKD 224.5 billion Future Fund, which was formed in January 2016 to invest Hong Kong’s fiscal reserves.

The Portfolio’s investments and governance will be overseen by government-formed committees.

HKMA

HKMA to Select Managers for New Growth Portfolio by H2 – Report

Subscribe to Our Newsletter!

Subscribe to Our Newsletter!