Hong Kong Monetary Authority‘s Long-term Growth Portfolio (LTGP) has yielded an internal return ratio of 13.5 percent as of the end of last year since its inception about seven years ago, a senior official said.
Eddie Yue, deputy chief executive of HKMA, said in an article published on the monetary authority’s website that the LTGP’s investment mandates are in line with the goals set forth for the government’s Future Fund.
The government had earlier decided to establish a long-term Future Fund with half of the Land Fund to be entrusted in the LTGP. The portion will be worth about HK$100 billion as part of the larger Land Fund that amounts to over HK$200 billion.
Expansion of the LTGP has gathered further momentum this year, Yue said.
The portfolio had aggregate new investments of US$9 billion in the first ten months of this year, and US$5 billion last year.
The LTGP has been used by Hong Kong’s de facto central bank to invest in alternative assets in a bid to diversify the risk exposure.
“Investing in alternative assets is challenging. Unlike conventional stocks and bonds traded in open markets, alternative asset markets are characterized by lower transparency and consistency in market standards,” Yue noted.
“Our strategy is to have a nimble and capable in-house investment team underpinned by the support of external investment managers,” he wrote.
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