Profiles of Hong Kong Major Service Industries
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Last updated: 24 September, 2008
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Venture Capital




Overview
  • Hong Kong is the largest venture capital centre in Asia providing local and regional start-up companies with a readily available source of equity financing.

  • Accounting for nearly one-third of all capital raised in Asia, the majority of venture funds in Hong Kong come from overseas and invest in overseas companies in the region.

  • Hong Kong's stock markets offer easier exits for venture investments. Among private-equity-backed IPOs, the Hong Kong Stock Exchange has hosted a major share of Chinese mainland investors' sales.

Industry Data

-

2006

June 2007

Number of venture capital funds

199

203

Estimated number of venture capital professionals

592

580

Capital under management (US$ million)

47,880

51,385
Source: The 2008 Guide to Venture Capital in Asia, Asian Venture Capital Journal


Range of Services

Hong Kong is the largest venture capital centre in Asia, managing 27% of the total capital pool in the region. As of June 2007, there were 203 Hong Kong-based funds with capital under management amounting to more than US$50 billion.


Service Providers

As of June 2007, Hong Kong had a pool of 580 venture capital professionals, the second highest in Asia excluding Japan. Many of the region's top venture capital firms have a presence in Hong Kong and are experienced in supporting each stage of venture capital funding from start-up to initial public offerings.


Exports

Hong Kong's venture capital industry is highly export-oriented. The majority of the regional funds are based in Hong Kong. An overwhelming majority of venture funds in Hong Kong are coming from overseas and are investing into overseas companies in the region, including Australia, Singapore, India, Korea, Japan and the mainland.


Industry Development and Market Outlook

The Chinese mainland is increasingly the focus of venture capital investment in the region. Hong Kong's private equity industry has developed strong expertise of investing in Asia, in particular the mainland. Investment in the mainland provides a major theme for Hong Kong's venture capital fund-raising activities.

The Mandatory Provident Fund (MPF) scheme provides an ample supply of funds to the industry. Insurance companies and pension funds, which play vital roles in directing MPF funds to various investment opportunities, represent a significant source of funds for Hong Kong's venture capital industry.

Financial services, telecommunications and computer related services accounted for nearly 40% of venture funds invested across Asia in 2006.

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