Fund Management Activities Survey 1999

Summary Findings

  1. The Fund Management Activities Survey (FMAS) collects information
    on fund management activities in Hong Kong in order to better understand
    the current state of the sector and with a longer term view to building a
    comprehensive industry database for regulatory and market facilitation
    purposes.
  2. The FMAS 1999 questionnaire was developed in consultation with the
    Hong Kong Investment Funds Association.
  3. All SFC registered intermediaries or exempt persons were asked to
    provide information if their primary investment advisory business during
    the year ended 31 December 1999 was management of funds or portfolios.
  4. In all, 142 registered intermediaries and 8 exempt persons declared their
    primary advisory business as Fund/Portfolio Management ¡V managing
    funds or portfolios.
  5. Some main aggregate figures are in the following table.

    Some main aggregate figures of FMAS 1999

    (as of 31 December 1999)

    HK$ ¡¦ 000

    Total assets under management by the company = (A)

    where A = B + C

    3,501,354,782

    Amount of assets directly managed by the company in Hong Kong = (B)

    749,385,041

    Amount of assets sub-contracted or delegated to other offices/third parties for management = (C)

    where C = D + E

    2,751,969,741

    Amount of assets sub-contracted or delegated to other offices/third parties in Hong Kong for management = (D)

    13,709,894

    Amount of assets sub-contracted or delegated to other offices/third parties overseas for management = (E)

    2,738,259,847

    Total assets managed in Hong Kong = (F)

    where F = B + D

    763,094,935

  6. Total assets under management by the 150 respondents amounted to
    HK$3,501.4 billion. Of these, $749.4 billion was directly managed by them
    in Hong Kong, while the remainder of $2,752 billion was sub-contracted or
    delegated to other offices or third parties either in Hong Kong ($13.7 billion)
    or overseas ($2,738.2 billion) for management.
  7. Total assets managed in Hong Kong were $763.1 billion, representing 21.8%
    of all assets under management by the respondents (see Chart 1). Of total assets
    managed in Hong Kong, those directly managed by the respondents accounted
    for 98.2% with the rest sub-contracted or delegated to other offices/third parties
    in Hong Kong for management (Chart 2).

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  1. Chart 3 shows the proportions of total assets under management by types
    of funds. For example, a total of 89 companies reported institutional
    businesses with $2,231 billion under management, or 63.7% of all funds
    under management. Retail public funds accounted for 13%.

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  1. Similarly, Chart 4 shows the proportions of total assets managed in Hong Kong by
    types of funds. Institutional funds accounted for 37.7%, followed by 31% and 23%
    respectively for retails public funds and pension funds.

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  1. A breakdown by various types of funds and the proportions of the assets
    under management that were managed in Hong Kong is shown in Chart 5.
    For example, of the $2,231 billion of institutional funds under management,
    only $287.9 billion or 12.9% was managed in Hong Kong. On the other hand,
    a great majority of private client funds was managed locally ¡V $38 billion
    or 90.6% of the total of $42 billion under management.

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  1. A total of 50 respondent companies managed SFC authorised funds, with assets
    under management totalling $455 billion - of which $235 billion or just over half
    (51.6%) was managed in Hong Kong by 46 of them (also see Chart 5 above).
  2. Chart 6 illustrates a breakdown by various types of funds and the proportions of
    total assets under management that were pooled and non-pooled. For pension funds,
    non-pooled funds accounted for $401 billion, or 76.7% of total assets under
    management. Of institutional funds under management, $1,897.3 billion or 85%
    were non-pooled accounts. Retail public funds were defined as SFC authorised
    funds in the survey and therefore all pooled funds.
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  1. Respondents also reported significant amounts of Offshore Retail Funds,
    in the category of Other Funds, totalling $250.2 billion, or 7.15% of total
    assets under management. 

    Notes:

    • SFC registered intermediaries and exempt persons whose primary
      advisory business or primary business was managing funds or portfolios
      were requested to complete the FMAS questionnaire. Assets managed by
      registered or exempt persons who did not declare advisory or management
      of funds as their primary business (e.g. banks) however were not included
      in the results.
    • The asset amount of SFC authorised funds reported by the respondents
      should not be equated with the total net asset value of all SFC authorised
      funds (which stood at US$298.9 billion or HK$2,331.3 billion as of 31
      December 1999). This is because some SFC authorised funds are
      managed by overseas fund management companies that are not SFC
      registrants or exempt persons.
    • Aggregate figures in various categories represent the total assets managed
      by respondents who reported business in the respective categories only.
      Respondents might be engaged in one or some of the businesses only.
    • The meanings of some of the terms used in the survey are as follows:

    "Total assets under management by the company"

    All those assets being the subject of contracts entered into by the respondent company and its "clients" for management by the respondent or its delegates, i.e. all assets sub-contracted or delegated to other offices/ third parties for advisory or management purpose should be included. To avoid double counting, where a "client" is another investment management company (being a SFC registrant or exempt person), the assets concerned should not be included.

    "Total assets managed in Hong Kong"

    Assets for which management activities are carried out in Hong Kong. These include assets directly contracted with clients by the company and managed in Hong Kong, and those which are delegated to other offices/ third parties in Hong Kong for management.

    "Pension Funds"

    Client funds that are designated as pension or retirement funds.

    "Institutional Funds"

    Client funds that are non-pension, non-retail in nature, e.g. fund houses, insurance companies, large corporate clients. Where funds authorised by the SFC are offered to institutional clients only, these should be classified under "Institutional Funds".

    "Private Client Funds"

    Client funds that are non-institutional, non-retail, non-pension in nature, e.g. individual high net worth clients (average personal net worth exceeding US$1 million during the year) with own accounts or portfolios managed on an individual or pooled basis.

    "Retail Public Funds"

    Retail funds authorised by the SFC. Where funds authorised by the SFC are offered to institutional clients only, these should be classified under "Institutional Funds". Where funds are offered to both retail and institutional clients, these should be separately identified and classified accordingly.

Investment Products Department
Securities and Futures Commission
June 2000