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Annual Review

HKVCA Chairman’s Report 2015-2016

 

Dear Members and Friends,

As your Chairman it is my duty but at the same time my sincerest privilege to provide this annual report detailing the amazing work undertaken by the Hong Kong Venture Capital and Private Equity Association (HKVCA) over the course of this past year.

It has been my sincere privilege to work with the dedicated staff and members of the Association, trying our best to ensure the HKVCA is the most effective and productive it can be.

 

Membership

Although this year was marked by a high degree of volatility and uncertainty, our industry continues to thrive. Despite the ongoing global economic slowdown, the markets were surprisingly resilient. It was a strong year for our organization as well. I am extremely pleased to be able to report that the HKVCA, continuing to build on its hard work of the past several years, showed robust growth both in terms of membership numbers as well as the success and scale of our events.

During the last year, we have grown our membership to more than 350 professional firms, representing practitioners across the full spectrum of private capital markets. Our member firms are highly accomplished and diverse, hailing from Hong Kong, Greater China, the Asia-Pacific region and other parts of the globe, including Europe and North America. We also have member firms from the frontier markets, including Russia.

The global, regional and local character of our member firms is a reflection of Hong Kong’s unique status within China. Hong Kong is not merely a regional hub, but is a recognized global center for business and finance.

In the coming years, the Association will continue to focus on the growth of its membership base. The HKVCA will continue to reach out to all sectors of the private equity and venture capital profession, solidifying our position as the unique umbrella organization best able to serve the interests and further the aspirations of our diverse and vital industry.  

 

Major Events

As part of our mission to help lead the growth and development within our industry, and as part of our ongoing commitment to our members, the HKVCA organizes a very full and active calendar of events. These events range from high profile international conferences and industry-relevant lectures, to formal training programs and social events.

The 6th Asia Private Equity Forum (APEF), one of our three flagship events, was held in January 2016 at the Hong Kong Convention and Exhibition Centre. The Forum examined the many challenges and opportunities that exist for value creation within the industry. It brought together an experienced group of private equity and venture capital practitioners with the aim of identifying the latest trends and the latest challenges facing private capital markets, across all stages and geographies in Asia. Some of the areas covered included private equity real estate, private debt and a robust attention to environmental, social and governance standards.

The third annual Hong Kong Venture Capital Forum (HKVCF), the second of our flagship events, was held in March this year and proved once again to be a tremendous success, with more than 200 industry professionals attending. This year’s event featured leading regional venture capitalists coming together to discuss the evolving venture environment, including the latest technological developments related to blockchain, healthcare and robotics. The feedback received by the HKVCA, from both attendee participants and the speakers, served to highlight the enormous popularity of this relatively new event, especially in terms of the quality of the discussions held on emerging technologies and the high levels of expertise exhibited by the panelists.

This year also marked the fifteenth year we have held the China Private Equity Summit (CPES), a leading global event focused on the dynamic and increasingly vital role the private equity industry plays in China. Held in May at the Hong Kong Convention and Exhibition Centre, CPES 2016, our third flagship event, attracted more than 500 venture capital and private equity practitioners, leading corporations, and other industry professionals and participants from across the globe. In addition to discussing the existing investment environment in China, there was also in-depth analysis of the opportunities and challenges investors face in terms of financial market reform and liberalization of cross-border transactions; the growth in Chinese overseas investment; and the current regulatory and taxation environment. The HKVCA was extremely proud of the success of this event and are confident of its continued popularity in the years to come. 

 

Education

The HKVCA is highly committed to providing truly value added educational opportunities to our members. The Private Equity Fundamentals Course is an important part of our commitment to the professionalism of our industry. Held annually, it is a comprehensive training course designed primarily for those wishing to enhance their knowledge of the core fundamentals of private equity and venture capital. In 2015 we were especially pleased to have the support of the Hong Kong Stock Exchange, Hong Kong University’s MBA program, as well as the MBA program at the Hong Kong University of Science and Technology.

One of the major highlights of the year among popular educational luncheon talks was a very special dinner with the Chief Justice of the Court of Final Appeal of Hong Kong on the evening of Monday, 18 April. Attendees were privileged to hear the Honorable Geoffrey Ma Tao-li deliver an important and thought-provoking speech on the fundamental principles that underlie both the rule of law and Hong Kong’s Basic Law.

Of course HKVCA members and supporters know how to have fun too and I am pleased to report that we held a number of very popular social events as well such as our annual Gala Dinner and annual Golf Day together with the series of wine tasting evenings, all proved to be especially popular and were consistently oversubscribed.

In the interest of brevity, I have mentioned only a few of the many events the HKVCA has held over the course of the year covered by this report. Going forward, the Association will continue to represent the economic interests of our member firms through promoting and providing our members with extensive opportunities for networking and the sharing of experiences and information.

 

Development of the Profession

The HKVCA is committed to continuing to build and grow based on our fundamental principles and the significant progress the Association has made in the last few years. With a membership of over 350 firms, the HKVCA is dedicated to expanding the diversity of our member base, in Hong Kong and across the Asia Pacific region.

As socially responsible investing criteria becomes more and more important in our industry, the HKVCA established this year a new Environmental, Social and Governance (ESG) Committee that will help raise awareness of ESG and bring together the interests of investors and managers to the degree to which ESG issues are being implemented. The Association also established a new Family Office Committee in order to encourage greater involvement by family offices and to provide them with a unique channel of participation in the private equity and venture capital industry.

As the key professional organization representing the venture capital and private equity industry in Hong Kong, we will continue to work hard promoting and strengthening the venture ecosystem by working in collaboration with government and other global venture bodies; and by ensuring a broad spectrum of expertise and a diversity of discussion on behalf of the venture community.

Ultimately, it is our members that are the lifeline of the HKVCA, and hence it is vital that our organization meet the industry’s needs. The Association therefore provides an immensely valuable platform for lobbying government on behalf of the industry in order to protect the interests of the private equity and venture capital community and positively impact the region’s regulatory and business environment. The Inland Revenue Department (IRD) recently released its Departmental Interpretation and Practice Note (DIPN) 51 and revised DIPN 43 which provide the IRD’s interpretation of the legislation enacted in July 2015 extending tax exemption to offshore private equity funds. The IRD’s position has created tremendous uncertainty where the HKVCA has a strong feeling that the new law would be unworkable for most private equity firms. We intend to be the voice for our industry and express our considerable concern to the government through continue lobbying the government via multiple channels and exploring the possibility of collaboration with other professional associations to provide a unified message on the stalled reforms affecting the fund management sector in Hong Kong.

 

Committees, Board and Staff

I have mentioned only a very few highlights of the HKVCA’s many activities over the course of the year. There are, of course, many members and committees that have also been very active and their work is deservedly highlighted elsewhere in this annual report.

I must also acknowledge and express my appreciation for the many members and industry partners who have collaborated and worked closely with us to make this year such a success. Our outstanding Board of Directors have given much of their time and their energy toward making the Association the invaluable asset it has become to its members, and for that I am truly grateful.

Of course no discussion about our achievements over the year would be possible without Joanne, our Secretary General, and the amazing team who have energized, organized and revitalized the Association. We could not have achieved what we have without their dedication, hard work and commitment.

It has been a great honor and awesome privilege to serve as Chairman of the HKVCA. I sincerely hope that our members are as pleased and proud of how our Association has grown and developed in such a short period of time. Today we are bigger, better and more influential than we have ever been. I look forward to all of us working together to help make the HKVCA the leading regional professional association for our industry. I look forward to continuing to work with you in the year ahead.

 

Eric Mason

Chairman

Hong Kong Venture Capital and Private Equity Association