Let's stick to Hong Kong and talk a bit more. Yeah, we've got to keep the positive vibes going. Right, Steve?
Not just on the outcomes of the IPO market. Let's talk a little more with the wealth management industry as well. There's a new Bloomberg Intelligence report forecasting that private wealth assets under management in the city will nearly double by 2030.
That's thanks to inflows from mainland China, etc. . Senior research analyst Tania Wall.
She joins us now, who did a really deep dive into this. A great read, really. And it's interesting you mention this for the growth that we're seeing in private wealth in Hong Kong.
First of all, what's driving that? Yes, So there's mainly two key factors. One is local household wealth.
We've seen a flood of migrants coming into the city recently and over the Hong Kong government saying that they saw 380,000 applications, you know, since late 2022. So I think that is a really big driver. But also, keep in mind, during protests in Covid, the industry actually still saw net new money every single year.
So even without the new migrants, I think there is still a very fundamental, a very fundamentally good support. And then the other piece would be on the cross-border side. So that's mainly driven by mainland China.
And, you know, given that they're so underinvested overseas with the capital controls where FPI, which is our foreign portfolio investments, it's only 6% of GDP, and that compares with 100% for for countries like the UK and Japan. So there's just huge opportunity for Hong Kong to tap that. Are they doing enough?
Obviously, this is a priority of the Hong Kong government. They've seen family money, family offices go to Singapore. We know that Switzerland is the big wealth hub, if you will, attracting cross-border flows.
But again, I'm going to be at an event in a couple of weeks where they're going to be trying to attract sovereign wealth funds, pension funds and the like to Hong Kong. But at what point is that the goal to get surpass Switzerland as the top destination for these cross-border funds? I do think the goal is to top Switzerland, but you know, with the growth drivers, I think that's definitely going to be the key trend.
I think we we expect Hong Kong to top Switzerland by 2025, which is a lot earlier than estimates out there, saying around 2027 to 2028. And the biggest driver is definitely mainland China. Right.
They've got the policy support where the regulators continue to expand the scope of the cross-border infrastructure like the stock connect, Wealth Connect, also the onshore property slump. That's actually great for wealth reallocation. Right.
So people will invest less in investment property while overseas investments which are high yielding, that's becoming increasingly attractive. So I think, you know, these are key drivers and of course, the overall diversification with geopolitics. I think Hong Kong should see money from every with all of family offices.
How well is Hong Kong doing in terms of attracting them to come here in the city? Yes. The Hong Kong has a leader in Singapore right now with 2700 single family offices where Singapore only has about 1650.
And I think going forward, Hong Kong could extend that lead because the MAS, which is the Singapore authorities, they continue to clamp down after the money laundering scandal and then also on tax on tax concessions for large sized family offices. It's actually better in Hong Kong. So I think in the near term, Hong Kong could have that edge.
