Hong Kong private equity market: size, funds and exits

Hong Kong is a place where private equity managers sit, where some of their funds are registered, where their investors have bank accounts and, increasingly, where their portfolio companies list. Those four roles are measured by four different statistics, and most confusion about the market comes from mixing them. This page takes them one at a time, with the figure, its date and who counted it.

For the regional picture and the deal data, start with private equity in Asia. This page narrows to Hong Kong.

How big is the Hong Kong private equity market?

The headline figure is capital under management. AVCJ Research data, reproduced in the Securities and Futures Commission’s survey, rank Hong Kong second in Asia after Mainland China, with US$229 billion under management by private equity funds, excluding real estate funds². The year before the figure was US$221 billion². The Financial Secretary’s January 2026 speech gives the same picture: Hong Kong is home to over 650 private equity firms with assets under management of around US$230 billion, second in Asia behind only the Chinese Mainland¹. The Hong Kong Monetary Authority ranks the city as the second largest private equity centre after Chinese Mainland⁶.

Worked example (our arithmetic)

A year-on-year change is a subtraction and a division. The inputs are the two AVCJ figures reported by the SFC²:

Private equity capital under management in Hong Kong grew by about 3.6% in 2024 on those figures (our arithmetic)². Treat it as a measure of size, not of returns: capital under management rises with new commitments and with valuations, and falls with distributions.

The same market, measured four ways

Two warnings follow. The SFC’s private-fund row covers every strategy, so it is wider than private equity². And the SFC’s own counts cover only firms it licenses or registers: some private equity firms in Hong Kong are neither licensed corporations nor registered institutions². A manager that runs a fund wholly from outside Hong Kong and only advises from the city can sit outside the survey, while the AVCJ figure may still include its funds. Currencies differ too: the SFC survey reports in Hong Kong dollars unless stated², and the AVCJ and Financial Secretary figures are in US dollars. This page does not convert between them.

Who is in the Hong Kong private equity market

Managers

The managers are the 650-odd firms¹. Their licensing sits inside a much bigger industry: the number of firms licensed to carry out asset management, Type 9 regulated activity, rose by 4% from 2,127 to 2,212 during 2024². Assets managed in Hong Kong made up 58% of the AUM of the asset management business, and 59% of these assets were invested in non-equity asset classes at the end of 2024².

Investors

Investors in Hong Kong private equity funds are typically professional investors based both in Hong Kong and offshore¹⁴. They include insurance companies, pension funds and financial institutions as well as wealthy individuals, investment offices of high-net worth families and funds of funds¹⁴. The professional investor test is concrete: an individual with a portfolio of at least HK$8 million qualifies¹⁴. The SFC survey shows the wider asset base that these investors sit inside: professional investors accounted for 73% of all asset management and fund advisory assets in 2024, up from 70%². Money from governments, sovereign wealth funds and central banks fell by 2% over the year².

Family offices form a second pool. The Financial Secretary counts more than 2 700 family offices in Hong Kong, over half of which manage assets of more than US$50 million¹. The Government has committed to facilitating at least 220 family offices in establishing or expanding operations in Hong Kong from 2026 to 2028¹. Retail and high-net-worth investors are also increasingly seeking exposure to private equity¹, a trend the Government is channelling through listed vehicles, covered under exits below.

The state as co-investor

The Hong Kong Investment Corporation Limited, HKIC, is a government-established vehicle that provides patient capital and makes strategic investments in high-potential ventures, particularly in hard technology, and co-invests in projects where justified¹. The Financial Secretary reports that for every dollar it invests it attracts around six dollars in private investment¹. It matters to this page as a market participant, not as an investment to buy: it sits beside private equity funds as a source of capital, and the Financial Secretary has said it is ready to collaborate with the private equity community¹. The Office for Attracting Strategic Enterprises, a separate Government unit, has attracted more than 100 strategic enterprises over the past three years¹.

Where Hong Kong-managed funds are set up

A fund is a legal vehicle, and where it is registered is a separate decision from where its manager works. Until recently the choice of fund vehicles in Hong Kong was very limited, and this changed with the introduction of the open-ended fund company in 2018 and the limited partnership fund in 2020¹⁴. Before that it was relatively rare for private equity fund vehicles to be domiciled in Hong Kong, and the majority of private equity funds managed from Hong Kong were domiciled in offshore jurisdictions, for example the Cayman Islands or the British Virgin Islands¹⁴.

The limited partnership fund, LPF, is the vehicle built for private equity. The Limited Partnership Fund Ordinance (Cap. 637) commenced operation on 31 August 2020⁷. The regime was introduced to attract private investment funds, including private equity and venture capital funds, to set up and register in Hong Kong⁷. An LPF has one general partner with unlimited liability and at least one limited partner with limited liability⁷. It is a registration scheme administered by the Companies Registry⁷. A limited partnership established in any jurisdiction outside Hong Kong may also register as an LPF without being dissolved or re-formed¹³. The limited partnership fund page sets out the mechanics, liability rules and annual filing.

How fast the register is growing

The Companies Registry’s figures are counts of registrations, not of capital: a registered LPF can be empty or small, and the registry does not say how much money sits in them. They show how many managers chose a Hong Kong vehicle, not how much private equity money has moved.

Worked example (our arithmetic)

The two Companies Registry totals give the growth over a year⁴³:

The register grew by roughly three-fifths in a year, and registrations in the first half of 2026 ran at three and a half times the pace of the first half of 2025 on the registry’s counts⁴³. The registry figures do not show why.

Licensing: who needs a licence to manage a fund from Hong Kong

Registering a fund does not licence its manager. Where fund management activities are carried on in Hong Kong in relation to securities, the fund manager needs a licence for Type 9 regulated activity, asset management¹⁴. In the SFC’s circular to private equity firms the same rule applies to general partners: a GP that conducts fund management business in Hong Kong is generally required to be licensed for Type 9⁸. A GP that has fully delegated all asset management functions to another entity licensed or registered for the activity need not be licensed itself⁸.

Two further rules shape day-to-day practice. An unlicensed GP should not represent to any prospective investor that it manages a private equity fund in Hong Kong⁸. And fund marketing activities generally constitute dealing in securities, so a firm carrying on that business would generally be required to be licensed for Type 1 regulated activity as well, unless it falls within an exemption for a Type 9 licensee⁸. The Type 9 licence page covers the decision path, the competence rules and the fees. The licensing rule is why the 2,212 Type 9 licensees above² are the starting point for counting managers, and why some private equity firms still fall outside the SFC’s data².

Tax: the fund exemption and the 2026 bill

Hong Kong’s tax treatment explains why a manager might base a fund here. The Inland Revenue Department’s practice note on the unified fund regime provides that all funds, regardless of their structure, their central management and control location, their size or the purpose that they serve, will enjoy profits tax exemption subject to meeting certain conditions⁹. One condition concerns who manages the fund: the transactions must be carried out in Hong Kong by, or arranged in Hong Kong by, a licensed corporation or registered institution, unless the fund qualifies in some other way⁹. The practice note also observes that private equity funds might not necessarily be managed by licensed corporations⁹.

Investments in private companies face four tests: whether the company holds immovable property, how long the investment is held, whether the fund has control, and how many short-term assets the company holds⁹. If the 10% threshold in the immovable property test is not exceeded, the investor will be exempt if the holding-period, control and short-term-asset tests are satisfied in good faith⁹.

The second concession concerns carried interest, the manager’s share of profit. A percentage of eligible carried interest received by a qualifying employee on or after 1 April 2020 is excluded from salaries tax, and at present that percentage is 100%¹⁰. An employee temporarily seconded to Hong Kong, without a separate employment contract with a qualifying person that carries on business in Hong Kong, is not a qualifying employee¹⁰.

The 2026 bill

On 12 June 2026 the Government gazetted the Inland Revenue (Amendment) (Preferential Tax Regimes for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026 to enhance the regimes for privately offered funds, family-owned investment holding vehicles and carried interest, with a view to attracting more funds and family offices to establish a presence in Hong Kong⁵. The Bill was scheduled for first reading on 24 June⁵. By 12 August 2026 the Bills Committee had finished going through it clause by clause, and the Government intends to bring it back to the Council for second reading before the end of 2026¹³. It is not law yet. The table compares what the Bill proposes with the position described above.

The HKMA has suspended the acceptance of new applications for certification of funds until further notice, in light of the proposed amendments⁶. The Bill adds a tax reporting mechanism and economic substance requirements, similar to those under the tax concession regime for family-owned investment holding vehicles⁵. For carried interest it adds a new condition: the entitlement to a share of profit must not be attributable to any capital contribution to the fund or be discretionary¹². Carry may also be paid directly to an employee or through a carry vehicle¹². This section covers a proposal. Check the text as enacted before relying on any detail.

The Mainland link

Much of Hong Kong’s private equity activity points north. The LPF regime was designed to facilitate the channeling of capital into corporates, including start-ups in the innovation and technology field in the Greater Bay Area⁷. On the asset management side, for Mainland-related firms in Hong Kong the AUM of their asset and wealth management business grew 15% to HK$3,086 billion, with net fund inflows up 68% to HK$256 billion². That is the SFC’s wider survey category, not private equity alone, but it shows which direction the capital is coming from. Hong Kong calls itself the world’s largest cross-boundary wealth management centre⁵, and the HKMA ranks it the largest cross-border private wealth management and hedge fund centre in Asia as well as the second largest private equity centre⁶.

Deals and exits

Hong Kong’s own stock exchange is one exit route for portfolio companies. The Financial Secretary reports that Hong Kong recorded 119 initial public offerings in 2025, raising more than HK$285 billion, an increase of over two times year on year and first globally¹. The Hang Seng Index rose by 28 per cent in 2025, following an 18 per cent increase in 2024¹. A vibrant stock market and robust IPO performance provide portfolio companies with clearer and more credible exit pathways¹.

Early 2025 showed the pipeline building. In the first quarter of 2025 the market raised around HK$18 billion across 15 IPOs¹¹. Six of the 15 IPOs raised over HK$1 billion each¹¹. The IPO pipeline then included 120 applicants, up from 86 at the end of 2024¹¹.

Exits remain the sore point of the wider region. Asia-Pacific exit value dipped 1% in 2024 compared with the prior year, and both LPs and GPs see the exit environment as the biggest impediment to strong returns¹¹. Greater China, in these data, includes China, Hong Kong and Taiwan¹¹, so the regional exit picture is not purely a Hong Kong one.

Hong Kong is widening the routes. The listing regime has been modernised with listing avenues for companies from the new economy and emerging sectors, including pre-revenue biotechnology companies and specialist technology companies¹. In February 2025 the SFC clarified the requirements for authorising closed-ended funds that invest mainly in private and less liquid assets¹, and an MPF fund can gain limited exposure to such funds subject to approval of the Mandatory Provident Fund Schemes Authority¹. The Asia private equity landscape itself is pivoting towards hard technology, particularly artificial intelligence, biotech and new energy¹. The pages on growth equity and leveraged buyouts explain the deal types that end in these exits.

What the numbers do not show

• Scope differs by source. US$229 billion is AVCJ’s measure of funds excluding real estate². HK$5,042 billion is the SFC’s measure of private funds of every kind². They are not the same market.
• Registrations are not money. An LPF count says how many partnerships exist³, not how much each holds.
• Speeches and law-firm notes are context. The Financial Secretary’s figures come from a speech¹. Law-firm summaries of the Bill are commentary on a draft¹².
• Regional data include Hong Kong with its neighbours. The Greater China data in the Mallesons compilation combine China, Hong Kong and Taiwan and exclude deals under US$10 million¹¹.
• Forecasts are not facts. The Bill is not law¹³, and no number on this page predicts the market’s next year.

Education only: nothing here is an offer or advice, and no fund, manager or vehicle is recommended. The Asia section collects the regional pages.