Despite recent moves to bolster the allure of Hong Kong’s family office market, uncertainty lies ahead in the politically shaken city.

Political unrest has structurally and permanently changed the fabric of Hong Kong which until recently had operated with little to no influence from mainland Chinese authorities. 

This has reportedly spooked investors including Chinese high net worth individuals who allegedly support the new regime «but not from their asset protection perspective».

«Hong Kong authorities have always followed a more laissez-faire approach with its financial services sector, which has worked well up until now,» according to a commentary by «Family Capital» (behind paywall). «But questions over Hong Kong’s independence from a much more interventionist mainland China have grown in the last year as Beijing has taken a more strident approach to the city’s freedoms.»

Countering Singapore

The report called the recent launch of the Family Office Association Hong Kong – led by founder Chi Man Kwan and supported by mostly multi-family offices – a «counter» to Singapore’s attractiveness as the region’s leading family office hub with 200, according to authorities from the city-state.

Kwan added that there were many inquiries from European family offices to set up in Hong Kong too. 

Sovereign Power

Meanwhile, the report underlined the power of Singapore’s sovereign status to actively promote specific parts of the economy such as the family office sub-sector within finance. 

Recent developments include the launch of an educational platform to improve relevant local talent and the likely extension of a scheme to single family offices that would allow it to manage assets more flexibly.

Same, Same But Different

Meanwhile, sovereign power is also being exercised in Hong Kong and some are reportedly optimistic about the outlook of integration within the financial sector on spaces such as more Greater Bay Area collaborations or cross-border capital market trading.

Understandably, not all are sanguine.

«Hong Kong’s viability as a center of family office activity in the years ahead is in the hands of Beijing,» the report added, authored by «Family Capital» publisher David Bain. «And for some groups that is a concern too much to bear…»