September 24, 2025 • 25 mins
Hong Kong's financial sector is roaring back, with IPOs surging and the city's exchange leading the world in public fundraising. The Hang Seng Index is up more than 30% this year, driven by biotech and tech stocks, while new stablecoin regulations are positioning Hong Kong as a digital-assets hub. Billions in untapped funds from mainland China are flowing in, fueling a wave of new family offices and a generational shift in wealth management.
Vivien Khoo, CEO of the Private Wealth Management Association in Hong Kong and a member of the government's Web3 task force, joins John Lee to discuss the drivers behind the city’s comeback. She shares insights into Hong Kong’s evolving role as a global connector, the rise of next-gen investors and the impact of digital-asset regulation.
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Speaker 1 (00:00):
Hong Kong's financial sector is roaring back to life. In
the first half of the year, IPO surged, making the
Cities Exchange number one globally for raising funds on the
public market. The Hangsing Index is up twenty seven percent
this year, led by biotech stocks. Hong Kong is also
driving ahead to become a digital assets hub with the
(00:22):
new stable coin ordinance. There's also billions in untapped funds
in China. This has driven a surge and money into
Hong Kong, with more family officers to manage that flow
of capital and a new generation of wealth taking over
risk remain. Of course, the property segment is still depressed
and geopolitical headwinds persist. You're listening to ASI Eccentric from
(00:46):
Bloomberg Intelligence. I'm John Lee in Hong Kong and this
week we're speaking with Vivian cou CEO of Hong Kong's
Private Wealth Management Association and previously ex head of compliance
at Goldman Sach. She's also a crypto advocate and on
the Government Web three task Force for regulatory matters. Vivian,
(01:07):
welcome to the show.
Speaker 2 (01:08):
Thank you, thanks for having me.
Speaker 1 (01:11):
I wanted to start off by asking you like about
Hong Kong. Are you surprised that the financial sector has
rebounded so quickly this year because at the beginning of
the year there was quite a lot of risks, uncertainty
regarding geed, political and tariff risks, China's economy was still
pretty slow.
Speaker 2 (01:28):
I would actually categorize it by talking about the comeback
started before this year, and then we are seeing a
gradual progression in terms of how things are recovering. We
have an ANNU report which we prepare every year. Last
year was the first year that we see the AUM
number increasing after a couple of years. And then if
(01:49):
you look at the statistic that came out from the
SFC survey this year, which reflected in twenty twenty four,
we see a very positive increase sort of double digit
fifteen percent an increase year over years. So I felt
that the comeback has started last year. Of course, you know,
there are different factors that would affect how people are investing,
(02:09):
how company is deploying funds, and how investors choose to invest.
But I see that that is a progression of different
things that's happening that's bringing the comeback.
Speaker 1 (02:18):
And just talking about some figures like I'm quoting the
Boston Consulting Group. They estimate that the cross border wealth
of Hong Kong is at two point seven trillion dollars.
Now that's almost the same size. Or it's about to
overtake Switzerland as the largest offshore WORLTH hub.
Speaker 2 (02:36):
But what's driving all this growth, Well, that's again that's
probably not a new phenomenon that Hong Kong. It's kind
of a position to take over Switzerland. You know, Switzerland
being a historical wealth management hub, you know, have a
lot that it's providing. But Hong Kong, I think a
few things that have really changed this year, even post COVID.
(02:57):
It's this role about super connector you see a more
flow between Hong Kong, rcion the Middle East, including some
that we participated in with the government, the delegations and
even this year alone also Hong Kong, we worked with FSDC,
they hosted some RCAN delegation. So there's a lot of
exchange in terms of how outside investment can come in
(03:19):
and also you know locally, how our own investor can
invest a broad So that's a lot of different discussion.
Regimes you know, immigration scheme and the like that are
facilitating all this discussion and investments cross flows.
Speaker 1 (03:32):
But how much of that money is coming from mainland China.
Speaker 2 (03:35):
Well, our reflected that majority. If we rank in all
the different regions that we see opportunities on, mainland China
is definitely on the top. But then our report last
year talked about, you know, the next one would be
Arzian like Arsian countries coming in the new corridors being built,
and the third one is Middle East. So the majority
of the wealth we see still coming from mainland, although
(03:57):
there's been some challenges in terms of recovery and in
terms of how the economy is like in China, if.
Speaker 1 (04:03):
We think of Hong Kong, traditionally the super rich, the
wealth you have been from the property segment, Like if
you look at the billionaires of Hong Kong, they're all
property tycoons.
Speaker 2 (04:12):
But now you look.
Speaker 1 (04:13):
At you all the money coming in from China. You
see the stock market, like biotech stocks doing really well,
there's a lot of tech IPOs, which industries is all
this new wealth coming from.
Speaker 2 (04:23):
I think it has to do with the evolution of
the different economy China, Hong Kong. Hong Kong, yeah, historically
known for property development and then China to a lot
of it. But if you see some of the newer
generation next generation, a lot of them focuses on technology digital.
And then again our report last year showed like biotech
(04:44):
as a top sector that investor invests in virtual asset
actually like class second and commodities. So I would characterize
it with a change in investment appetite and or different
generation they are interested in investing in different things. And
talking more close on the Hong Kong IPO market, we
also see some reforms in terms of the Hong Kong Exchange,
(05:05):
how they're change a listing regime to facilitate you know,
biotech companies in some of the listing chapters to facilitate
easier listing in Hong Kong. So that certainly has helped.
Speaker 1 (05:15):
Okay, talking about IPOs, like I recently spoke to the
Hong Kong Exchange and they said there's over two hundred
companies waiting to be listed in Hong Kong. You know,
with all this money being listed, is this being reinvested
into the local economy.
Speaker 2 (05:31):
I can probably just talk around in terms of what
I see on what's coming into wealth management. So as
I mentioned earlier, it's clearly reflected the year over year,
that's a pretty significant increase. Whether that comes from IPO
or not. The wealth management market, a lot of the revenue,
what we call transaction revenue, does come from IPO market,
So I would say that, you know a portion of
(05:53):
that is definitely coming in into wealth management. But again
some listed here they might be looking for dual listing.
You know, Hong Kong, it would be a reasonable place,
would be very mature sort of finance infrastructure to be
listening here. You know, we're a free market. And we
also just got back in terms of the Investment Index
Global index, I believe number three, like in the top three,
(06:15):
and that's kind of moved up also in the recent
few years. And if you look at women touched on
this a bit later or not on family offices, you know,
some of the family office that decide to come to
Hong Kong also is because of the package of our
immigration about that concession and other factors that they like
to move to Hong Kong and come to invest here.
Speaker 1 (06:35):
Well let's talk about it now. So with all this
new money coming into Hong Kong, is this being managed
by like said, private banks, Is it like family officers.
Speaker 2 (06:45):
So the range of different investors that we see. Our
association deals well with a private bank, so we kind
of interact with them more. But we also work with
family office Hong Kong for example. They are the ones
that who goes out pretty aggressively. No mandate by the
government with specific APIs on how many single family office
for them to bring it in Hong Kong. We have
(07:05):
a live example. We just admitted one of the pretty
sitable US fund managing over eight hundred billion. They're a
family sort of fund and they have establishment in Singapore,
not yet in Hong Kong. They were actively looking at
it and they just joined it as a member. So
it kind of shows their confidence or at least they
think that they're definitely opportunity that they feel there is
(07:26):
in Hong Kong. Otherwise. We also work very closely in
giving feedback on things like tax concession. You know, if
you have family office coming, like if you look at
the different brackets of the amount that will qualify for
tax exemption family offices Hong Kong is lower than Singapore
or Dubai, you know, we always get compared. These are
two very calm and comparable in terms of jurisdiction that
(07:48):
people compare us with.
Speaker 1 (07:49):
So in your position, you'd be able to see, like
all the creation of new family officers, you're saying, there's
still a lot to be created.
Speaker 2 (07:56):
Family office it can of a lose to them in
a lot of sense. I think single family officers, you know,
they're basically at the wealthy families. You know, they have
our own team that manages the well and they're what
you call the external asset managers. They are more usually
like traditionally X banking professionals and that they have set
up their own shop to manage money. So they're kind
(08:16):
of two different sets, the single family officers. If you
look at the latest Hong Kong report also the tracking
numbers of how many I believe even this year alone
there maybe fifty like so far, I think fifty that
has he either KNW that's been set up or is
expanding their presence in Hong Kong. So those are all
very positive.
Speaker 1 (08:34):
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(08:58):
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And Shair I wanted to talk about the opportunity from
mainland China. Now that's been a traditional source of the
fundraising for family officers and wealth management. Like how much
more is there to go?
Speaker 2 (09:14):
That's like a million dollar question. I think some of
the challenges hasn't really changed, probably in decades. It's, you know,
the ability to move funds offshore because a lot of
these wealthy individuals, you know, they probably are very wealthy
already in China, but you know, how are they able
to do they already have funds offshore. That's usually a
big factor. I mean, if they are wealthy early on
(09:37):
they decided, you know, they want to expand internationally in
different businesses, they probably already have funds offshore. But the
Connect scheme, for example, you know, the wealth connect scheme,
which is a huge focus of our industry. We have
been loving for some time that the quota right now
doesn't really surface purpose yet because there's only three million
dollars in rem and Bee, and if China consider revising
(09:58):
the limits or make the next enhancement, we are strongly
advocating that it should be a much higher number because
the sort of general account opening sides or even professional
investor is at a one million US level. So we
would hope that's something that we can aspire to work
with the regulators and the government on.
Speaker 1 (10:15):
We did sort of touch on like the next generation
of wealth. There's been a lot of publicity on how
much wealth is being I guess like transferred from like
the founders to the second sometimes the third generation. You
know they are often Gen Z or millennials. Tell us
about this segment, how the needs different.
Speaker 2 (10:33):
It's a great question because even within the association itself,
never a clear definition of what the next gen is.
Next gen is usually, you know, the most common character
you characterize them with more tax savvy. That's why we
in our report last year, the one to five million
segment was one that we think would have more explosive growth,
(10:53):
primarily because they can be served by banks. But then
a lot of banks now actually also have tach plat
where you provide technology that I think those younger generations
can invest themselves, so some of other setup like robot
advisors or tech companies that they are more and more
that serves with that segment. So we felt that that
(11:13):
segment will have more ways to invest and also some
of them, particularly next gen for wealthy families, they look
at impact investing or you know, is what they do
meaningful because they are very wealthy. But how they want
to spend the funds. Do they want to invest in
things that would be more climate friendly because they truly
(11:34):
believe that in the whatever twenty years, if more damage
is done to the planet, then that affects the way
that they live. So they have a different mentality into
how they want to spend money and invest.
Speaker 1 (11:45):
And are they also more amenable to sort of new products.
I'd imagine the old generation would be much more amenable
to like the sixty forty equity on portfolio. But are
they more willing to invest in things like in a
digital asset.
Speaker 2 (12:00):
That's certainly a big trend because this was probably a
couple of years back. But when they look at the
age group that obviously is most savvy or most interesting
in digital asset is usually like below thirty five. But
I see that changing with this cycle, you see much
more institution participating in the virtual asset space. That's why
when you look closer to Hong Kong about Stable Point Ordinance,
(12:24):
about the virtual asset framework the SFC put out as fire,
you know, some of these framework is really to kind
of make traditional finance and the financial technology sector converge.
So I see that now there will be more offerings
that would be more simple, that you would allow a
more layman to invest in. I think this cycle that
(12:44):
would probably change as a trend that in the past,
primarily it will be younger generation investing in virtual assets.
But I see that depending on what country, because more
undeveloped country usually you have a higher adoption. So the
unbanked population usually have a higher interest in virtual assets
because you just need a computer, a phone, you don't
(13:05):
really need a back account to transact a lot of
them transaction tokens. And then more unstable countries also seem
to have higher adoption.
Speaker 1 (13:13):
So Vivian obviously the CEO of Hong Kong's Private Wealth
Management Association, But as we mentioned previously, you do have
another HAD and you are on the Government Web three
task Force. Were you intimately involved in the stable coin
audience that just passed in August.
Speaker 2 (13:29):
I wouldn't say I was intimately involved. We definitely gave feedback.
And then this goes before PWMA. So before PWMA, I
was running another association which helped crypto companies to do advocacy.
So when I met with the HMA, they said we
were the first crypto association that went with them, and
that was when they first started thinking about stable point.
(13:49):
I'm guessing that had to go back to prob the
twenty twenty two twenty three because at that point the
regulatory framework wasn't as developed. For example, the SFC and
the AMY are still looking at what they will respectively
be responsible for stable coin. You know, I think people
understand that it will be used for payment rails, but
then there's a big suitability aspect as in, you know,
(14:11):
it's a suitable for retail professional So at that time
it wasn't as developed, should I say, But fast forward,
you know, I think the whole Hong Kong got very excited. Also,
I think that drew on what's happening in the US
as well, with the Genius Act, which also focuses on
like giving licensing for sable cooin.
Speaker 1 (14:29):
Yeah, So the US Genius Act was passed in July,
and I believe just a couple of weeks later, Hong
Kong passed the stable coin audience I believe on the
first of August. So it's it was really quick. I
think the market was really surprised at how fast Hong
Kong moved on this, Like what is this signal to
the market that you know, Hong Kong wants to be
a leader in this space, like tell us.
Speaker 2 (14:52):
Well, the government is loud and clear on that point.
They want to build Hong Kong into a digital ass
at hub. And the appetite you put a framework on
table coin has been in the pipe, as I mentioned,
you know, since we first interacted, because there was an
early consultation that came out on that and there was
a sandbox that quite a number of companies had gone
into in terms of stable coin, but it was, as
(15:12):
you said, not until August where the sort of legal
framework came out. Right now, I think you probably saw
HAMA and SFC put out also an alert telling people
not to get so excited about stable coin, because of
course there's a lot of potential. You know, IMF had
a report just said that twenty twenty four the two
trillion of stable point volume. So that's a big number
(15:34):
that people are excited about. But stable cooin is not
like bitcoin, for example, or ethereum. It's fairly it's not
going to go up the way it does. And then
if you look at the requirements as well, it's fairly
difficult to comply. And I think that's done for purpose
with investive protection in mind. So I'm sure HMA doesn't
just want to give the license to any company. So
(15:55):
one of the ones that are our member for Cena Charter,
for example, they're the first one that now said they're
going to issue a Hong Kong dollar back stable coin
with a JV with Animalka, with Hong Kong Telecom. So
some of those larger brands, more reputable firms, I'm sure
actually would be one of the first batch that that
get our license.
Speaker 1 (16:14):
Yeah, we just literally interviewed Animoka a couple of weeks
ago on stable coins. But I wanted to get your view.
Is there much of a difference between the rules and
laws of say the Genius Act versus Hong Kong's stable
Cooin Ordinance.
Speaker 2 (16:28):
Oh huge, Yes, there are two different two very different frames,
although you know they both touch on stable coins. So
number one, if you look at things like the capital
and the liquiditive requirement, Hong Kong has very specific requirements
that what needs to be backed by and it can
be in different currency. You know, REM and B would
be one of them. Can be on US dollars, you
can be Hong Kong dollars Genius Act for the US
(16:50):
one you can only denominated in US dollars and I
won't sort of go through odo technicalities, but they are
a different level of regulation for the Genius Acts. So
if you are sort of a bigger setup, then you
get regulated at the federal level. It was a smaller
one that you get regulated by the state level. It
kind of draws on interesting questions on would the traditional
(17:11):
banks be applying for those you know, who would be
the first one? You know, Circle ANETA would be the
first two. That's because in circulation right now in terms
of volume, but they're well known, you know Circle when listed,
so they're different regime and the Genius Act it also
got rolled out quite quickly. But the whole infrastructure that
the US is developing is going to be a multi
(17:31):
year long infrastructure so for people to even apply and
look at all the jurisdictional consideration on the size, you know,
on volume and whatnot, it will take some time. Whereas
I kind of see Hong Kong would have some major
player that would get licensed in the shorter term.
Speaker 1 (17:49):
So when do you think these licenses will be announced?
Speaker 2 (17:54):
I think that's more of ahma question. But they would
be incentifized, you know, if those more putable firms can
meet the requirements to kind of put them in action,
because that would be a great branding opportunity for Hong Kong,
you know, to be one of the first one who
approved like a sable coin issuer out of Hong Kong
and also on Hong Kong dollar nominated for example. So
(18:15):
I don't think it's going to be years. I mean
you talking about.
Speaker 1 (18:17):
Months, and with these stable coins in Hong Kong, there
have to be one hundred percent back by that feared currency, right, Well.
Speaker 2 (18:23):
There's a range of different things. I mean, it cand
of get listed out in the requirement, so it can
be US treasury, it can be things that are liquid
and safe. Because if you remember Luna. I don't know
if everybody remember Luna like I did, but the last
big stable coin crash called Luna, which you know went
down ninety percent, so people realize tablecoin actually isn't that stable.
(18:43):
After that, everybody drew reference that was l go back
stable coin that all the different jurisdiction at least a
larger one, and Hong Kong included. They would only consider
a list of very narrow range of what can be backed,
and it has to be liquid, it has to be
so it's only a very narrow range of what it
can be used to back, viet being one of them.
Speaker 1 (19:04):
And is that more stringent than the US genie sect.
Speaker 2 (19:07):
I think it's different. It's kind of comparable and different.
I think the idea would be there comparable because it
still needs to be back by something that has liquidity
and safe. But the US has a broader poor things
that you can use to back the stable cooin.
Speaker 1 (19:21):
Okay, listening to the comments from the Trump administration and
in particular Treasury Secretary Scott Besson, now one of the
aims of the genie sect seems to be to maintain
the hegemony of the US dollar, to make sure that
you know US dollar is dominant in transactions in trade finance.
What's Hong Kong's angle.
Speaker 2 (19:42):
Well, there are a few different angles you can look at.
I think in just looking at as a payment mail,
you know it has fastest settlement, cheaper all that is
actually kind of a positive thing. But people also look
at you know, if I want to achieve that, do
I have to use stable coin? Can I use other
tokens to achieve that? That's why I think a lot
of people looking at should we tokenize the money market
(20:04):
once or do we use savil point to back it?
So of course saverle point, if you use it under
properly regulated is sure then it's safer because as you said,
it's one for one back. The volatility is supposed to
be much lower than if you used to token, but
it largely depends on how the circulation is. You know,
where you can use it. It's a bit like you know,
if I create own token, it can only be used
(20:26):
in my own company. What's the point of it? So
the Hong kongole Bank, stable Point, or even with other denominator,
the idea is you can break through a lot of
this cross border payment rail or other things that you
could you know, typically would need days or weeks to
get a transfer or get charge a lot to do.
Speaker 1 (20:43):
Look this is and this is a true story. Last year,
it once took me like five working days to send
money from Hong Kong to Australia. I'm not going to
tell you which bank that was, but but Vivian used
to be a banker for many years, so you do
have experience in this space. Do you think these utile assets,
stable coins they intermediate the banking industry.
Speaker 2 (21:05):
Well, it's already happening. But one thing I point out
which I find interesting is the whole notion of the
centralized finance crypto was that it was going to disrupt, disintermediate.
But in a lot of ways. If you look at
things that are happening now, things are converging. I feel
that they complement each other rather than try to push
(21:26):
the other out of business. But of course, you know,
disrupting meaning that the traditional needs to change otherwise they
lose a fair bit of business. Just as I was
mentioning earlier, you know some of these robodvisory or tach
platform is disrupting maybe the lower end of the private
banking market. And crypto and again distable coins, some of
these payment rails probably are disrupting credit cards Let's say
(21:49):
I pay users stable coin now, and then do I
still need credit cards to be getting credit if it
is faster cheaper, so master and least that's why they
start at having save a coin on circulation. Now you
can you can actually use some specific credit cards which
are crypto friendly to be paying for things.
Speaker 1 (22:08):
What about other types of tokenized assets, like do you
see that you know really growing?
Speaker 2 (22:14):
That depends on what it is, because the most commonly
thing that's being tokenized now are things that money market funds.
I also had a question myself. Money market fund is
very liquid already, you know, why do you need to
tokenize it? But when I look at the costs, it's safe.
And also it can be used as collateral, like if
you can immediately settle, like you know, you can actually
cut out some of these processes. The amount it is
(22:36):
safe is pretty phenomenal, and that is something that's easily understood.
But not all tokenized quote unquote assets or instrument it's
going to be better than non tokenized one Robin he
for example, they look in tokenized security sell a lot,
but trading is securities in a tokenized form is very different,
you know from trading a stock you don't have voting power,
(22:58):
you might not have a lot of avenue that is
listing that specific token, and they're just different considerations. So
people should just understand the difference. Just putting a token
azeed wrapper around it doesn't mean that, you know, it
is a word three and it's definitely better than the
non tognized version.
Speaker 1 (23:15):
We've talked about a lot of things we've talked about,
like the IPOs coming back to Hong Kong, all the
wealth management products driving the growth of family offices, and also,
you know, Hong Kong's in the digital landscape. Where do
you see Hong Kong going in the next sort of
say five years, Like how is the city going to change?
Speaker 2 (23:32):
Well, I'm born and bred from Hong Kong. I have
an extremely positive view of Hong Kong. I just think
Hong Kong has a lot going for it. But Hong
Kong probably needs your reset. You know, we are a
very strong financial center, we still are, but I think
it's just kind of looking at where the opportunitylize on
how to capitalize it. Why the government decided to build
(23:53):
Hong Kong as a word three or digital asset HALP
is because some of the opportunities that they see that
Hong Kong can really capitalize being very cootutions and to China.
There's a lot of tech talent out there, you know,
Cyberport Science Park. I think all this tech development can
really help develop more solutions that are Hong Kong based.
They have a big incubation site and on the virtual
(24:13):
asset side because we move so fast in the last
couple of years in coming up with frameworks, and China
investor also has interest if they have money afterhore to
be investing in Hong Kong. So we're in a very
strategically well positioned region to be capitalizing all that. But
you know, having that said, there's also a lot of competition,
you know, Dubai and sort of Saudi and some of
(24:35):
these other regions have been named again and again about oh,
are we kind of losing business losing clients. I don't
actually see those as mutually exclusive. As I said, it
probably is complementary. A client can probably have booking centers
in multiple jurisdiction, So they're just going to look at
like where the money flows, where you have best infrastructure,
(24:56):
where you have favorable government policy. And I feel Hong
Kong as developing fast in terms of making changes, particularly
post COVID, to be capitalizing on all of that.
Speaker 1 (25:06):
Great, well, that's a fantastic way to end the show. Vivian,
thank you for sharing your insights.
Speaker 2 (25:11):
Thank you.
Speaker 1 (25:12):
You've been listening to Age Eccentric from Bloomberg Intelligence. I'm
John Lee in Hong Kong. You can listen to all
our episodes on Spotify, Apple Podcasts, or wherever you listen.
And this podcast was produced and edited by Clara Chen.
Thanks for listening.
Hong Kong's financial sector is roaring back to life. In
the first half of the year, IPO surged, making the
Cities Exchange number one globally for raising funds on the
public market. The Hangsing Index is up twenty seven percent
this year, led by biotech stocks. Hong Kong is also
driving ahead to become a digital assets hub with the
(00:22):
new stable coin ordinance. There's also billions in untapped funds
in China. This has driven a surge and money into
Hong Kong, with more family officers to manage that flow
of capital and a new generation of wealth taking over
risk remain. Of course, the property segment is still depressed
and geopolitical headwinds persist. You're listening to ASI Eccentric from
(00:46):
Bloomberg Intelligence. I'm John Lee in Hong Kong and this
week we're speaking with Vivian cou CEO of Hong Kong's
Private Wealth Management Association and previously ex head of compliance
at Goldman Sach. She's also a crypto advocate and on
the Government Web three task Force for regulatory matters. Vivian,
(01:07):
welcome to the show.
Speaker 2 (01:08):
Thank you, thanks for having me.
Speaker 1 (01:11):
I wanted to start off by asking you like about
Hong Kong. Are you surprised that the financial sector has
rebounded so quickly this year because at the beginning of
the year there was quite a lot of risks, uncertainty
regarding geed, political and tariff risks, China's economy was still
pretty slow.
Speaker 2 (01:28):
I would actually categorize it by talking about the comeback
started before this year, and then we are seeing a
gradual progression in terms of how things are recovering. We
have an ANNU report which we prepare every year. Last
year was the first year that we see the AUM
number increasing after a couple of years. And then if
(01:49):
you look at the statistic that came out from the
SFC survey this year, which reflected in twenty twenty four,
we see a very positive increase sort of double digit
fifteen percent an increase year over years. So I felt
that the comeback has started last year. Of course, you know,
there are different factors that would affect how people are investing,
(02:09):
how company is deploying funds, and how investors choose to invest.
But I see that that is a progression of different
things that's happening that's bringing the comeback.
Speaker 1 (02:18):
And just talking about some figures like I'm quoting the
Boston Consulting Group. They estimate that the cross border wealth
of Hong Kong is at two point seven trillion dollars.
Now that's almost the same size. Or it's about to
overtake Switzerland as the largest offshore WORLTH hub.
Speaker 2 (02:36):
But what's driving all this growth, Well, that's again that's
probably not a new phenomenon that Hong Kong. It's kind
of a position to take over Switzerland. You know, Switzerland
being a historical wealth management hub, you know, have a
lot that it's providing. But Hong Kong, I think a
few things that have really changed this year, even post COVID.
(02:57):
It's this role about super connector you see a more
flow between Hong Kong, rcion the Middle East, including some
that we participated in with the government, the delegations and
even this year alone also Hong Kong, we worked with FSDC,
they hosted some RCAN delegation. So there's a lot of
exchange in terms of how outside investment can come in
(03:19):
and also you know locally, how our own investor can
invest a broad So that's a lot of different discussion.
Regimes you know, immigration scheme and the like that are
facilitating all this discussion and investments cross flows.
Speaker 1 (03:32):
But how much of that money is coming from mainland China.
Speaker 2 (03:35):
Well, our reflected that majority. If we rank in all
the different regions that we see opportunities on, mainland China
is definitely on the top. But then our report last
year talked about, you know, the next one would be
Arzian like Arsian countries coming in the new corridors being built,
and the third one is Middle East. So the majority
of the wealth we see still coming from mainland, although
(03:57):
there's been some challenges in terms of recovery and in
terms of how the economy is like in China, if.
Speaker 1 (04:03):
We think of Hong Kong, traditionally the super rich, the
wealth you have been from the property segment, Like if
you look at the billionaires of Hong Kong, they're all
property tycoons.
Speaker 2 (04:12):
But now you look.
Speaker 1 (04:13):
At you all the money coming in from China. You
see the stock market, like biotech stocks doing really well,
there's a lot of tech IPOs, which industries is all
this new wealth coming from.
Speaker 2 (04:23):
I think it has to do with the evolution of
the different economy China, Hong Kong. Hong Kong, yeah, historically
known for property development and then China to a lot
of it. But if you see some of the newer
generation next generation, a lot of them focuses on technology digital.
And then again our report last year showed like biotech
(04:44):
as a top sector that investor invests in virtual asset
actually like class second and commodities. So I would characterize
it with a change in investment appetite and or different
generation they are interested in investing in different things. And
talking more close on the Hong Kong IPO market, we
also see some reforms in terms of the Hong Kong Exchange,
(05:05):
how they're change a listing regime to facilitate you know,
biotech companies in some of the listing chapters to facilitate
easier listing in Hong Kong. So that certainly has helped.
Speaker 1 (05:15):
Okay, talking about IPOs, like I recently spoke to the
Hong Kong Exchange and they said there's over two hundred
companies waiting to be listed in Hong Kong. You know,
with all this money being listed, is this being reinvested
into the local economy.
Speaker 2 (05:31):
I can probably just talk around in terms of what
I see on what's coming into wealth management. So as
I mentioned earlier, it's clearly reflected the year over year,
that's a pretty significant increase. Whether that comes from IPO
or not. The wealth management market, a lot of the revenue,
what we call transaction revenue, does come from IPO market,
So I would say that, you know a portion of
(05:53):
that is definitely coming in into wealth management. But again
some listed here they might be looking for dual listing.
You know, Hong Kong, it would be a reasonable place,
would be very mature sort of finance infrastructure to be
listening here. You know, we're a free market. And we
also just got back in terms of the Investment Index
Global index, I believe number three, like in the top three,
(06:15):
and that's kind of moved up also in the recent
few years. And if you look at women touched on
this a bit later or not on family offices, you know,
some of the family office that decide to come to
Hong Kong also is because of the package of our
immigration about that concession and other factors that they like
to move to Hong Kong and come to invest here.
Speaker 1 (06:35):
Well let's talk about it now. So with all this
new money coming into Hong Kong, is this being managed
by like said, private banks, Is it like family officers.
Speaker 2 (06:45):
So the range of different investors that we see. Our
association deals well with a private bank, so we kind
of interact with them more. But we also work with
family office Hong Kong for example. They are the ones
that who goes out pretty aggressively. No mandate by the
government with specific APIs on how many single family office
for them to bring it in Hong Kong. We have
(07:05):
a live example. We just admitted one of the pretty
sitable US fund managing over eight hundred billion. They're a
family sort of fund and they have establishment in Singapore,
not yet in Hong Kong. They were actively looking at
it and they just joined it as a member. So
it kind of shows their confidence or at least they
think that they're definitely opportunity that they feel there is
(07:26):
in Hong Kong. Otherwise. We also work very closely in
giving feedback on things like tax concession. You know, if
you have family office coming, like if you look at
the different brackets of the amount that will qualify for
tax exemption family offices Hong Kong is lower than Singapore
or Dubai, you know, we always get compared. These are
two very calm and comparable in terms of jurisdiction that
(07:48):
people compare us with.
Speaker 1 (07:49):
So in your position, you'd be able to see, like
all the creation of new family officers, you're saying, there's
still a lot to be created.
Speaker 2 (07:56):
Family office it can of a lose to them in
a lot of sense. I think single family officers, you know,
they're basically at the wealthy families. You know, they have
our own team that manages the well and they're what
you call the external asset managers. They are more usually
like traditionally X banking professionals and that they have set
up their own shop to manage money. So they're kind
(08:16):
of two different sets, the single family officers. If you
look at the latest Hong Kong report also the tracking
numbers of how many I believe even this year alone
there maybe fifty like so far, I think fifty that
has he either KNW that's been set up or is
expanding their presence in Hong Kong. So those are all
very positive.
Speaker 1 (08:34):
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(08:58):
If you like what you're here, don't forget to subscribe.
And Shair I wanted to talk about the opportunity from
mainland China. Now that's been a traditional source of the
fundraising for family officers and wealth management. Like how much
more is there to go?
Speaker 2 (09:14):
That's like a million dollar question. I think some of
the challenges hasn't really changed, probably in decades. It's, you know,
the ability to move funds offshore because a lot of
these wealthy individuals, you know, they probably are very wealthy
already in China, but you know, how are they able
to do they already have funds offshore. That's usually a
big factor. I mean, if they are wealthy early on
(09:37):
they decided, you know, they want to expand internationally in
different businesses, they probably already have funds offshore. But the
Connect scheme, for example, you know, the wealth connect scheme,
which is a huge focus of our industry. We have
been loving for some time that the quota right now
doesn't really surface purpose yet because there's only three million
dollars in rem and Bee, and if China consider revising
(09:58):
the limits or make the next enhancement, we are strongly
advocating that it should be a much higher number because
the sort of general account opening sides or even professional
investor is at a one million US level. So we
would hope that's something that we can aspire to work
with the regulators and the government on.
Speaker 1 (10:15):
We did sort of touch on like the next generation
of wealth. There's been a lot of publicity on how
much wealth is being I guess like transferred from like
the founders to the second sometimes the third generation. You
know they are often Gen Z or millennials. Tell us
about this segment, how the needs different.
Speaker 2 (10:33):
It's a great question because even within the association itself,
never a clear definition of what the next gen is.
Next gen is usually, you know, the most common character
you characterize them with more tax savvy. That's why we
in our report last year, the one to five million
segment was one that we think would have more explosive growth,
(10:53):
primarily because they can be served by banks. But then
a lot of banks now actually also have tach plat
where you provide technology that I think those younger generations
can invest themselves, so some of other setup like robot
advisors or tech companies that they are more and more
that serves with that segment. So we felt that that
(11:13):
segment will have more ways to invest and also some
of them, particularly next gen for wealthy families, they look
at impact investing or you know, is what they do
meaningful because they are very wealthy. But how they want
to spend the funds. Do they want to invest in
things that would be more climate friendly because they truly
(11:34):
believe that in the whatever twenty years, if more damage
is done to the planet, then that affects the way
that they live. So they have a different mentality into
how they want to spend money and invest.
Speaker 1 (11:45):
And are they also more amenable to sort of new products.
I'd imagine the old generation would be much more amenable
to like the sixty forty equity on portfolio. But are
they more willing to invest in things like in a
digital asset.
Speaker 2 (12:00):
That's certainly a big trend because this was probably a
couple of years back. But when they look at the
age group that obviously is most savvy or most interesting
in digital asset is usually like below thirty five. But
I see that changing with this cycle, you see much
more institution participating in the virtual asset space. That's why
when you look closer to Hong Kong about Stable Point Ordinance,
(12:24):
about the virtual asset framework the SFC put out as fire,
you know, some of these framework is really to kind
of make traditional finance and the financial technology sector converge.
So I see that now there will be more offerings
that would be more simple, that you would allow a
more layman to invest in. I think this cycle that
(12:44):
would probably change as a trend that in the past,
primarily it will be younger generation investing in virtual assets.
But I see that depending on what country, because more
undeveloped country usually you have a higher adoption. So the
unbanked population usually have a higher interest in virtual assets
because you just need a computer, a phone, you don't
(13:05):
really need a back account to transact a lot of
them transaction tokens. And then more unstable countries also seem
to have higher adoption.
Speaker 1 (13:13):
So Vivian obviously the CEO of Hong Kong's Private Wealth
Management Association, But as we mentioned previously, you do have
another HAD and you are on the Government Web three
task Force. Were you intimately involved in the stable coin
audience that just passed in August.
Speaker 2 (13:29):
I wouldn't say I was intimately involved. We definitely gave feedback.
And then this goes before PWMA. So before PWMA, I
was running another association which helped crypto companies to do advocacy.
So when I met with the HMA, they said we
were the first crypto association that went with them, and
that was when they first started thinking about stable point.
(13:49):
I'm guessing that had to go back to prob the
twenty twenty two twenty three because at that point the
regulatory framework wasn't as developed. For example, the SFC and
the AMY are still looking at what they will respectively
be responsible for stable coin. You know, I think people
understand that it will be used for payment rails, but
then there's a big suitability aspect as in, you know,
(14:11):
it's a suitable for retail professional So at that time
it wasn't as developed, should I say, But fast forward,
you know, I think the whole Hong Kong got very excited. Also,
I think that drew on what's happening in the US
as well, with the Genius Act, which also focuses on
like giving licensing for sable cooin.
Speaker 1 (14:29):
Yeah, So the US Genius Act was passed in July,
and I believe just a couple of weeks later, Hong
Kong passed the stable coin audience I believe on the
first of August. So it's it was really quick. I
think the market was really surprised at how fast Hong
Kong moved on this, Like what is this signal to
the market that you know, Hong Kong wants to be
a leader in this space, like tell us.
Speaker 2 (14:52):
Well, the government is loud and clear on that point.
They want to build Hong Kong into a digital ass
at hub. And the appetite you put a framework on
table coin has been in the pipe, as I mentioned,
you know, since we first interacted, because there was an
early consultation that came out on that and there was
a sandbox that quite a number of companies had gone
into in terms of stable coin, but it was, as
(15:12):
you said, not until August where the sort of legal
framework came out. Right now, I think you probably saw
HAMA and SFC put out also an alert telling people
not to get so excited about stable coin, because of
course there's a lot of potential. You know, IMF had
a report just said that twenty twenty four the two
trillion of stable point volume. So that's a big number
(15:34):
that people are excited about. But stable cooin is not
like bitcoin, for example, or ethereum. It's fairly it's not
going to go up the way it does. And then
if you look at the requirements as well, it's fairly
difficult to comply. And I think that's done for purpose
with investive protection in mind. So I'm sure HMA doesn't
just want to give the license to any company. So
(15:55):
one of the ones that are our member for Cena Charter,
for example, they're the first one that now said they're
going to issue a Hong Kong dollar back stable coin
with a JV with Animalka, with Hong Kong Telecom. So
some of those larger brands, more reputable firms, I'm sure
actually would be one of the first batch that that
get our license.
Speaker 1 (16:14):
Yeah, we just literally interviewed Animoka a couple of weeks
ago on stable coins. But I wanted to get your view.
Is there much of a difference between the rules and
laws of say the Genius Act versus Hong Kong's stable
Cooin Ordinance.
Speaker 2 (16:28):
Oh huge, Yes, there are two different two very different frames,
although you know they both touch on stable coins. So
number one, if you look at things like the capital
and the liquiditive requirement, Hong Kong has very specific requirements
that what needs to be backed by and it can
be in different currency. You know, REM and B would
be one of them. Can be on US dollars, you
can be Hong Kong dollars Genius Act for the US
(16:50):
one you can only denominated in US dollars and I
won't sort of go through odo technicalities, but they are
a different level of regulation for the Genius Acts. So
if you are sort of a bigger setup, then you
get regulated at the federal level. It was a smaller
one that you get regulated by the state level. It
kind of draws on interesting questions on would the traditional
(17:11):
banks be applying for those you know, who would be
the first one? You know, Circle ANETA would be the
first two. That's because in circulation right now in terms
of volume, but they're well known, you know Circle when listed,
so they're different regime and the Genius Act it also
got rolled out quite quickly. But the whole infrastructure that
the US is developing is going to be a multi
(17:31):
year long infrastructure so for people to even apply and
look at all the jurisdictional consideration on the size, you know,
on volume and whatnot, it will take some time. Whereas
I kind of see Hong Kong would have some major
player that would get licensed in the shorter term.
Speaker 1 (17:49):
So when do you think these licenses will be announced?
Speaker 2 (17:54):
I think that's more of ahma question. But they would
be incentifized, you know, if those more putable firms can
meet the requirements to kind of put them in action,
because that would be a great branding opportunity for Hong Kong,
you know, to be one of the first one who
approved like a sable coin issuer out of Hong Kong
and also on Hong Kong dollar nominated for example. So
(18:15):
I don't think it's going to be years. I mean
you talking about.
Speaker 1 (18:17):
Months, and with these stable coins in Hong Kong, there
have to be one hundred percent back by that feared currency, right, Well.
Speaker 2 (18:23):
There's a range of different things. I mean, it cand
of get listed out in the requirement, so it can
be US treasury, it can be things that are liquid
and safe. Because if you remember Luna. I don't know
if everybody remember Luna like I did, but the last
big stable coin crash called Luna, which you know went
down ninety percent, so people realize tablecoin actually isn't that stable.
(18:43):
After that, everybody drew reference that was l go back
stable coin that all the different jurisdiction at least a
larger one, and Hong Kong included. They would only consider
a list of very narrow range of what can be backed,
and it has to be liquid, it has to be
so it's only a very narrow range of what it
can be used to back, viet being one of them.
Speaker 1 (19:04):
And is that more stringent than the US genie sect.
Speaker 2 (19:07):
I think it's different. It's kind of comparable and different.
I think the idea would be there comparable because it
still needs to be back by something that has liquidity
and safe. But the US has a broader poor things
that you can use to back the stable cooin.
Speaker 1 (19:21):
Okay, listening to the comments from the Trump administration and
in particular Treasury Secretary Scott Besson, now one of the
aims of the genie sect seems to be to maintain
the hegemony of the US dollar, to make sure that
you know US dollar is dominant in transactions in trade finance.
What's Hong Kong's angle.
Speaker 2 (19:42):
Well, there are a few different angles you can look at.
I think in just looking at as a payment mail,
you know it has fastest settlement, cheaper all that is
actually kind of a positive thing. But people also look
at you know, if I want to achieve that, do
I have to use stable coin? Can I use other
tokens to achieve that? That's why I think a lot
of people looking at should we tokenize the money market
(20:04):
once or do we use savil point to back it?
So of course saverle point, if you use it under
properly regulated is sure then it's safer because as you said,
it's one for one back. The volatility is supposed to
be much lower than if you used to token, but
it largely depends on how the circulation is. You know,
where you can use it. It's a bit like you know,
if I create own token, it can only be used
(20:26):
in my own company. What's the point of it? So
the Hong kongole Bank, stable Point, or even with other denominator,
the idea is you can break through a lot of
this cross border payment rail or other things that you
could you know, typically would need days or weeks to
get a transfer or get charge a lot to do.
Speaker 1 (20:43):
Look this is and this is a true story. Last year,
it once took me like five working days to send
money from Hong Kong to Australia. I'm not going to
tell you which bank that was, but but Vivian used
to be a banker for many years, so you do
have experience in this space. Do you think these utile assets,
stable coins they intermediate the banking industry.
Speaker 2 (21:05):
Well, it's already happening. But one thing I point out
which I find interesting is the whole notion of the
centralized finance crypto was that it was going to disrupt, disintermediate.
But in a lot of ways. If you look at
things that are happening now, things are converging. I feel
that they complement each other rather than try to push
(21:26):
the other out of business. But of course, you know,
disrupting meaning that the traditional needs to change otherwise they
lose a fair bit of business. Just as I was
mentioning earlier, you know some of these robodvisory or tach
platform is disrupting maybe the lower end of the private
banking market. And crypto and again distable coins, some of
these payment rails probably are disrupting credit cards Let's say
(21:49):
I pay users stable coin now, and then do I
still need credit cards to be getting credit if it
is faster cheaper, so master and least that's why they
start at having save a coin on circulation. Now you
can you can actually use some specific credit cards which
are crypto friendly to be paying for things.
Speaker 1 (22:08):
What about other types of tokenized assets, like do you
see that you know really growing?
Speaker 2 (22:14):
That depends on what it is, because the most commonly
thing that's being tokenized now are things that money market funds.
I also had a question myself. Money market fund is
very liquid already, you know, why do you need to
tokenize it? But when I look at the costs, it's safe.
And also it can be used as collateral, like if
you can immediately settle, like you know, you can actually
cut out some of these processes. The amount it is
(22:36):
safe is pretty phenomenal, and that is something that's easily understood.
But not all tokenized quote unquote assets or instrument it's
going to be better than non tokenized one Robin he
for example, they look in tokenized security sell a lot,
but trading is securities in a tokenized form is very different,
you know from trading a stock you don't have voting power,
(22:58):
you might not have a lot of avenue that is
listing that specific token, and they're just different considerations. So
people should just understand the difference. Just putting a token
azeed wrapper around it doesn't mean that, you know, it
is a word three and it's definitely better than the
non tognized version.
Speaker 1 (23:15):
We've talked about a lot of things we've talked about,
like the IPOs coming back to Hong Kong, all the
wealth management products driving the growth of family offices, and also,
you know, Hong Kong's in the digital landscape. Where do
you see Hong Kong going in the next sort of
say five years, Like how is the city going to change?
Speaker 2 (23:32):
Well, I'm born and bred from Hong Kong. I have
an extremely positive view of Hong Kong. I just think
Hong Kong has a lot going for it. But Hong
Kong probably needs your reset. You know, we are a
very strong financial center, we still are, but I think
it's just kind of looking at where the opportunitylize on
how to capitalize it. Why the government decided to build
(23:53):
Hong Kong as a word three or digital asset HALP
is because some of the opportunities that they see that
Hong Kong can really capitalize being very cootutions and to China.
There's a lot of tech talent out there, you know,
Cyberport Science Park. I think all this tech development can
really help develop more solutions that are Hong Kong based.
They have a big incubation site and on the virtual
(24:13):
asset side because we move so fast in the last
couple of years in coming up with frameworks, and China
investor also has interest if they have money afterhore to
be investing in Hong Kong. So we're in a very
strategically well positioned region to be capitalizing all that. But
you know, having that said, there's also a lot of competition,
you know, Dubai and sort of Saudi and some of
(24:35):
these other regions have been named again and again about oh,
are we kind of losing business losing clients. I don't
actually see those as mutually exclusive. As I said, it
probably is complementary. A client can probably have booking centers
in multiple jurisdiction, So they're just going to look at
like where the money flows, where you have best infrastructure,
(24:56):
where you have favorable government policy. And I feel Hong
Kong as developing fast in terms of making changes, particularly
post COVID, to be capitalizing on all of that.
Speaker 1 (25:06):
Great, well, that's a fantastic way to end the show. Vivian,
thank you for sharing your insights.
Speaker 2 (25:11):
Thank you.
Speaker 1 (25:12):
You've been listening to Age Eccentric from Bloomberg Intelligence. I'm
John Lee in Hong Kong. You can listen to all
our episodes on Spotify, Apple Podcasts, or wherever you listen.
And this podcast was produced and edited by Clara Chen.
Thanks for listening.
Hosts And Creators
John Lee
Tom Corbett
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