China's ultra rich set to boost Hong Kong wealth assets by 50% in 2023

HNWIs from the Mainland are edging out AuM from other APAC markets.

As China’s rich get richer, Hong Kong’s wealth managers are increasingly expecting the volume of assets they hold to roughly double over the next five years, according to a survey by Private Wealth Management Association and KPMG.

More than half (58%) of wealth managers expect an annual growth in assets under management (AuM) at 10-20% by 2023 as the Mainland and family offices continue to paint bright growth prospects for the local private wealth management (PWM) industry.

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“Hong Kong’s status as the gateway between mainland China and the rest of the world will be key as the city continues to benefit from being the first port of call for wealthy mainland Chinese individuals looking to diversify and manage their wealth globally,” the report’s authors said.

Assets from China’s high-net worth individuals are expected to wrestle market share from other territories like Asia-Pacific and Hong Kong as Mainland AuM is poised to extend its steep climb from 34% to 49% by 2023 and eat up the share of other markets. 

This bodes well for Hong Kong as the international market volume of the SAR ballooned 125% between 2010 to 2017 allowing it to power ahead of Panama and Caribbean in market share in the international wealth management pie, according to an ealier study by Deloitte. 

Hong Kong has beat the thriving commercial centers of New York, Tokyo and Los Angeles as it serves as home to the largest ultra-wealthy population in the world with the number of people with a net worth of over US$30m hitting 10,010 in 2017, according to a report from Wealth-X.

The SAR also benefits from a number of cross-border initiatives that bring greater value to the PWM industry including the Stock Connect programmes with the Shanghai and Shenzen stock exchanges, QFII and QDII.

Another strong growth driver are family offices as highlighted by the fact that half of total PWM AuM comes from institutional and corporate professional investors who are looking to diversify their asset holdings into Asia.

To respond to this booming demand, wealth managers are actively hiring people from the Mainland or forging partnerships between onshore and offshore platforms.