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Fuelling Startup Success: Attracting and Cultivating Home-based Alternative Investment Funds (FSDC (Hong Kong))

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StudyFSDC (Hong Kong)January 202550 pages75 min readOriginal source
Key number
31.1 HKD trillion
Assets managed by Hong Kong's asset and wealth management sector p.4
What changed
2%
Mainland China's share of global deal value in 2024, down from 6% in 2020 p.15

Summary

  • Hong Kong's asset and wealth management sector manages over HKD 31.1 trillion (USD 4.0 trillion) in assets, 65% of which originates from international sources.p.4
  • In 2023 alone, the global startup ecosystem was estimated to have created USD 7.6 trillion in value, more than double the figure from 2020.p.8
  • Hong Kong ranks 5th worldwide and 2nd in Asia, as of June 2024, with fund managers overseeing US$240 billion in AUM across private equity, venture capital and private debt.p.12
  • In 2022, private credit funded USD 333 billion globally, with significant allocations directed toward high-growth sectors such as technology.p.17
  • Asia's private credit AUM stands at USD 90 billion, only about 10% of the size of the US market and approximately 30% of the European market.p.17
  • Universities contribute 53% of Hong Kong's gross domestic expenditure on R&D, while private sector investment lags at 41%.p.26

Key insights

  1. Hong Kong dedicated over HKD 100 billion to more than 70 government initiatives to strengthen its innovation and technology ecosystem.p.10
  2. The Global Startup Ecosystem Report 2024 values Hong Kong's emerging ecosystem at USD 59 billion.p.10
  3. Mainland China's share of global deal value dropped from 6% in 2020 to 2% in 2024.p.15
  4. The global PE/VC investment market rebounded 5% year-on-year in 2024 to USD 56 billion, with deal volume up 54% and private credit deals up 256%.p.17
  5. Private credit has historically delivered annualised returns of approximately 10%, and non-Asian investors contribute 77% of the capital raised by private credit managers in Asia.p.18
  6. Sovereign wealth fund AUM surged from USD 1.2 trillion in 2000 to USD 12 trillion by mid-2024.p.19
  7. In 2024, global venture capital in late-stage startups reached USD147 billion.p.20
  8. By December 2024 there were over 1,245 unicorns globally.p.21
  9. Globally, corporate VC constitutes 35%-40% of total investment, while direct corporate investment in Hong Kong is minimal.p.27

Funders mentioned

Churchill Asset ManagementInnoVen CapitalJ.P. MorganNew Zealand Growth Capital Partners (NZGCP)Talent Venture Group

Topics and entities

GlobalPrivate debt and venture debtPrivate equityPrivate marketsPublic funding and grantsRegulationStartup ecosystemsVenture capitalCyberportFinancial Services Development CouncilHong Kong Monetary AuthorityHong Kong Science and Technology ParksMubadala Investment CompanyPreqinPublic Investment FundStartup Genome

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