The Zhitong Finance App learned that on July 22, KPMG released the latest “Hong Kong Asset Management and Private Equity Outlook” report, which indicates that the reform of the fund tax exemption system and tax relief system for ancillary equity is expected to attract a new round of regional and global asset management companies to enter Hong Kong.
According to the latest “Asset and Wealth Management Activity Survey” released by the Securities Regulatory Commission, the size of assets under management in Hong Kong increased 20% year on year to a record high in 2025, and the net fund inflow during the year soared 193% year on year, about three times that of last year. 56% of the assets managed by Hong Kong are invested in mainland China and overseas markets outside Hong Kong, reflecting the continued stability of Hong Kong's position as an international asset allocation center.
KPMG predicts that Hong Kong's annual IPO capital raising is expected to reach about HK$350 billion. The Hong Kong capital market is also showing strong momentum. Hong Kong regained the top position in global initial public offering (IPO) capital raising in 2025. The related upward trend continued until 2026. Currently, it still ranks among the top two in the world in terms of capital raising scale. The KPMG report also pointed out that ETFs will become an important growth engine for Hong Kong's asset management industry. In the first half of this year, the average daily turnover of Hong Kong ETFs reached HK$39.6 billion, an increase of 17% over the same period last year.
Darren Bowdern (Darren Bowdern), head of KPMG's alternative investment department in the Hong Kong Special Administrative Region of China, said that by providing a traceable 0% real tax rate on ancillary equity and performance fees, Hong Kong will further eliminate uncertainty in the current tax system and enhance the appeal of private equity, private credit and hedge funds to set up and operate investment platforms in Hong Kong. It is expected that the measures will attract more international asset managers to establish long-term investment teams in Hong Kong, and use Hong Kong as an important base for managing high-value portfolios in Asia.
According to the report, the ETF market will continue to expand as investor demand gradually expands from traditional passive index products to active strategies, yield products, thematic investments, virtual assets, and tactical trading products. The increasing diversification of product types not only helps improve market liquidity, broaden investor choices, but also brings more product distribution and business development opportunities to global and regional asset management companies.