Fund-raising in Asia. Tan Choo Lye K&L Gates Hong Kong & Singapore

Transcription

1 Fund-raising in Asia Tan Choo Lye K&L Gates Hong Kong & Singapore Copyright 2010 by K&L Gates Solicitors. All rights reserved.

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5 Statistics Total Asia net worth US$996 billion with 332 billionaires (Forbes Asia) Total hedge fund AUM in Hong Kong increased from US$9.1 billion in 2004 to US$63.2 billion in 2010 (SFC Report on Hedge Fund Survey) China AUM expected to hit US$2.2 trillion in 2010 (Channel News Asia) Overall individual investable assets of RMB62 trillion, a 19% increase over ,000 HNW (holding individual investable assets of not less than RMB10 million) at the end of 2010 with aggregate investable assets of RMB15 trillion Fastest growing number of HNW came from inland 4

6 Fund-raising methods Public Listings Passporting Private Equity Funds High Net Worth Individuals 5

7 Why Hong Kong? Existing experience Trilingual sophisticated employee base Client base English common law system Strong and sophisticated advisory support Gateway to PRC Fastest growing number of new millionaires Converging point in Asia for Western funds professionals Commonwealth, safe-haven perception + access to PRC market + access to beneficial local PRC benefits 6

8 PRC $$$$$ 7

9 Other popular jurisdictions Singapore Market-friendly Access to South Asian capital Taiwan Popular for UCITs funds Perception of PRC-friendly jurisdiction Japan Access to North Asian capital 8

10 Issues Licensing Prospectus registration for public offers Solicitation/Definition of financial advice Compliance with securities and financial regulators and laws Costs Market 9

11 Hong Kong Meaning of active marketing Frequent visits Mass media programmes Internet activities targetted at the public in Hong Kong Meaning of public in Hong Kong A section of the public Less than 50 persons from the Companies Ordinance Meaning of business 10

12 Hong Kong Offer Registration Prospectus Registration & Requirements Exemptions from prospectus requirements Relevant Safe Harbour Exemptions Offers to professional investors Small offers Minimum subscription offers Private placements Exclusions to exemptions in relation to structured products (came into effect 13 May 2011) Effect of legends Legislative requirements Non-effective statements (e.g. stating an offer is not an offer on the cover) 11

13 Hong Kong Authorisation of collective investment schemes in Hong Kong May take up to 12 months Recognised jurisdiction schemes UCITS IV 12

14 PRC No specific law, prohibition or regulation on marketing of foreign funds on a private basis Marketing may constitute a business activity for which regulation is extensive Public offers subject to the authority of China Securities Regulatory Commission; and Ministry of Commerce 13

15 PRC Public offers of shares require a PRC-incorporated company to be the issuer Joint venture with a PRC entity is advisable but control by foreign shareholder is allowed Subject to restrictions on foreign investment in certain industry Public offers of fund units require a PRC-incorporated fund manager Joint venture with a PRC entity is necessary as foreign ownership cannot exceed 49% Foreign ownership must be from a foreign entity approved by CSRC 14

16 PRC Restrictions on outbound funds of PRC investors For corporate investors, regulatory approval of not less than 3 PRC regulatory authorities required For individual investors :- Regulatory approval of SAFE Use of QDIIs Foreign exchange controls 15

17 Passporting No automatic passporting within Asia Mutual recognition of UCITs funds to an extent 16

18 Considerations Short or long-term? Where are your proposed investors based? Costs? What products are you marketing? What is the objective of your fund? Sector/region/productbased? Living standards 17

19 Tan Choo Lye K&L Gates