About KPMG China
KPMG China has offices located in 31 cities with over 15,000 partners and staff, in Beijing, Changchun, Changsha, Chengdu, Chongqing, Dalian, Dongguan, Foshan, Fuzhou, Guangzhou, Haikou, Hangzhou, Hefei, Jinan, Nanjing, Nantong, Ningbo, Qingdao, Shanghai, Shenyang, Shenzhen, Suzhou, Taiyuan, Tianjin, Wuhan, Wuxi, Xiamen, Xi’an, Zhengzhou, Hong Kong SAR and Macau SAR. Working collaboratively across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located.
KPMG is a global organization of independent professional services firms providing Audit, Tax and Advisory services. KPMG is the brand under which the member firms of KPMG International Limited (“KPMG International”) operate and provide professional services. “KPMG” is used to refer to individual member firms within the KPMG organization or to one or more member firms collectively.
KPMG firms operate in 143 countries and territories with more than 273,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. Each KPMG member firm is responsible for its own obligations and liabilities.
KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.
In 1992, KPMG became the first international accounting network to be granted a joint venture license in the Chinese Mainland. KPMG was also the first among the Big Four in the Chinese Mainland to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong firm can trace its origins to 1945. This early commitment to this market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in KPMG’s appointment for multidisciplinary services (including audit, tax and advisory) by some of China’s most prestigious companies.
Easing of Covid restrictions, huge prospects in the Chinese Mainland market and dry powder in the system will boost the Asset Management & Private Equity sector in the year ahead, says KPMG China
The end to quarantine and easing of other Covid restrictions in Chinese Hong Kong and the Chinese Mainland have been a promising start to 2023.
The end to quarantine and easing of Covid restrictions have been a promising start to 2023
31 January 2023, Hong Kong (SAR), China ("Hong Kong") - The end to quarantine and easing of other Covid restrictions in Chinese Hong Kong and the Chinese Mainland have been a promising start to 2023. Assuming that the path to full reopening continues, the momentum will carry the asset management sector into a much brighter year ahead, according to KPMG’s latest report, while private equity in particular will benefit from the reopening of the border.
Bonn Liu, Head of Asset Management, ASPAC, KPMG China, said:
Hong Kong’s asset managers are getting ready to seize the opportunities across the region as activity in the sector revives now that restrictions have largely been dropped.
Asset Management and Private Equity 2023 Outlook considers the outlook for the asset management and private equity sector, from broad issues including regulatory developments to key topics like ESG and the prospects for the crypto space.
The asset management sector is looking forward to returning to normality this year, enabling fund managers to make the most of the growing opportunities.
Vivian Chui, Head of Securities & Asset Management, Hong Kong, KPMG China, said:
The removal of most of the remaining Covid restrictions is fantastic news for the sector, it means that Hong Kong can really get back to business in 2023.
However, there are also challenges and competition. Although Hong Kong has a number of incentives aimed at developing the asset management sector, KPMG China would like to see a government task force set up to assess these initiatives, to ensure that we remain competitive and can seize the opportunities ahead. Hong Kong must refine and promote its range of industry incentives as it faces increasingly fierce competition as an asset management hub.
The private equity market for dollar funds in the Chinese Mainland slowed in 2022, but this is likely to change in the year ahead as fund managers seek to make use of the dry powder that has amassed.
Darren Bowdern, Head of Alternative Investments, Hong Kong, KPMG China, said:
We expect that the amount of dry powder in the system will help to boost activity in the asset management sector in 2023 as GPs deploy that capital in key markets throughout Asia.
Other highlights of Asset Management and Private Equity 2023 Outlook are as below:
- Range of tax incentives show support of the asset management sector, but need more refinement before they can fulfil their potential.
- Hong Kong needs to update its funds exemption rules, so that fund managers have the certainty they need to continue to domicile their funds and investment platforms in the city. Such measures will be needed if Hong Kong is to remain competitive on tax, and continue to serve as Asia’s leading asset management hub.
- Regulatory developments
- Liquidity risk management for open-ended funds is a priority for local and global regulators at the moment as they seek to enhance the stability and transparency of markets.
- Regulatory scrutiny, investor demand and global trends are pushing ESG up the agenda, giving asset managers the opportunity to differentiate themselves.
- ESG continues to grow in importance for the asset management sector in Hong Kong with the new regulations of Securities and Futures Commission on climate-related risk, while sustainability-related investment generally becomes more mainstream.
- Family offices
- Hong Kong’s family office incentive, expected to be launched in April, is a welcome development that will attract more investment to the city and give more tax certainty for investors. However, Hong Kong faces competition for the family office market from other jurisdictions.
- Private equity
- Rebound in private equity expected in 2023 as China’s Covid restrictions ease and dry powder needs to be deployed.
- Huge change ahead for MPF service providers as administration of Hong Kong’s retirement savings scheme shifts towards the centralised eMPF platform.
- Virtual assets
- Hong Kong’s standing as a virtual assets hub will be enhanced as recent turmoil in the sector encourages investors to seek well-regulated regimes.
- Going forward, the regulator will need to find ways to protect the city’s broad base of investors while also allowing enough flexibility for sophisticated investors to be more adventurous.
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