Hong Kong Financial Services Development Council report: Three recommendations for attracting patient capital to Hong Kong, including broadening product types

Recently, the Hong Kong Financial Services Development Council (FSDC) published a research report titled "Strengthening Hong Kong as an International Asset and Wealth Management Hub: Attracting Patient Capital." The report puts forward three core policy recommendations on attracting, guiding, and nurturing long-term "patient capital" from international institutions, mainland China, and local capital pools, aimed at consolidating Hong Kong's position as Asia's leading international asset and wealth management hub. Patient capital is characterized by a longer investment horizon, lower sensitivity to short-term market volatility, and a focus on creating sustainable value, with pension funds and insurance capital being key components. Patient capital is crucial to building a long-term, stable wealth management hub. As global retirement savings and insurance capital pools continue to expand, and as demand from mainland China's pension and insurance funds for overseas asset allocation grows increasingly strong, Hong Kong, with its unique advantages, serves as an important bridge connecting international and regional long-term capital. In mainland China, the insurance industry held assets worth RMB41.3 trillion (approximately US$6.1 trillion) at the end of the fourth quarter of 2025, but the proportion allocated to overseas assets was only 5.4%, far below the 15% regulatory cap. Meanwhile, the mainland's "three-pillar" pension system had reached RMB15.66 trillion in scale in 2024 and is projected to grow to RMB22 trillion to RMB28 trillion by 2030. As population aging accelerates, demand for cross-border asset diversification and liability matching will bring unprecedented growth opportunities for the development of patient capital in Hong Kong. Mr. Laurence Li, Chairman of the Hong Kong FSDC, said: "As Asia's leading international financial center, Hong Kong plays a key role in connecting global patient capital with regional economic opportunities. Patient capital can provide a stable source of funding, help withstand market cyclical fluctuations, drive financial innovation, and support long-term and sustainable economic development. By broadening product types, deepening cross-border market connectivity, and enhancing the competitiveness of the operating environment, Hong Kong will continue to strengthen its position as a global hub for patient capital." After extensive consultation with asset management institutions, insurance companies, pension funds, and industry leaders, the report puts forward specific recommendations around three core directions: Broadening product types: If Hong Kong is to develop into a patient capital hub, it must address existing market gaps by cultivating the bond market, diversifying equity investment products, and strengthening risk management frameworks to provide attractive products that meet investor needs. Deepening cross-border connectivity: Mainland China possesses enormous patient capital potential and also has strong demand for international long-term investment. As mainland China consolidates its position by fostering a robust stock market ecosystem and enhancing cross-border investment and financing facilitation, deepening mutual access mechanisms and exploring new connections in the pension and insurance sectors will benefit both the mainland and Hong Kong markets. Improving the market ecosystem to meet future development: Building an attractive asset and wealth management center depends not only on product innovation and cross-border channels but also on creating a robust and enabling environment. Leveraging the city's long-term capital, reducing cross-border tax barriers, providing fiscal incentives, upgrading market infrastructure, and strengthening corporate governance standards are crucial to complementing products and investment channels in attracting a steady stream of patient capital.