Hong Kong鈥檚 sovereign wealth fund is seeking to substantially lift its exposure to alternative asset classes to maximise returns.
The Future Fund, set up in 2016, has HK$224.5bn (鈧�25bn) under management for 鈥減lacement in longer-term asses with a view to securing higher returns鈥�.
During his budget speech this week, Hong Kong鈥檚 financial secretary, Paul Chan, said that in the first two years of operation, the Future Fund had achieved a composite rate of return of 4.5% in 2017 and 9.6% in 2018.
鈥淭o further optimise the use of the fund, I will invite several experienced persons in the financial services sector to advise me on the fund鈥檚 investment strategies and portfolios to achieve more diversified investments,鈥� he said.
Chan said the objective was to enhance returns while also consolidating Hong Kong鈥檚 status as a financial, commercial and innovation centre, and raising Hong Kong鈥檚 productivity and competitiveness in the long run.
A government spokesman told 91传媒在线 that the financial secretary had invited several leaders from the financial services and business sectors to make recommendations on the investment strategies and portfolios of the Future Fund.
鈥淢ore than 50% of the Future Fund may be set aside for placement with Hong Kong鈥檚 Exchange Fund鈥檚 Long-Term Growth Portfolio (LTGP),鈥� the government spokesman said.
This consists of alternative assets, such as private equity and real estate.
In October last year, the deputy chief executive of the Hong Kong Monetary Authority (HKMA), Eddie Yue, wrote in its HKMA鈥檚 Insight publication that the Exchange Fund had recently started investing in infrastructure projects under the LTGP.
Exchange Fund is the investment vehicle of HKMA, the special administrative region鈥檚 central bank.
It has oversight of Hong Kong鈥檚 HK$4.18trn foreign reserves.
A year-end report showed that by the end of September last year, the Exchange Fund had invested HKD190.9bn in private equity and HK$87.4bn in real estate.
According to its year-end report, the Exchange Fund鈥檚 assets were invested mostly in deposits (HK$326bn), debt securities (HK$2.83trn) Hong Kong equities (HK$175.5bn), other equities (HK$456.9bn) and other assets (HK$274.8bn).
