Hong Kong’s New Future Fund Creates Opportunities to Build “Brand Hong Kong” and Secure its Position as an International Financial Centre
Last year, the Hong Kong government established two sovereign funds, the Future Fund investing in private equity and properties outside Hong Kong and the Innovation and Technology Venture Fund to stimulate private investments and increase deal flow in local Hong Kong technology start-ups. Given the intense competition for good opportunities, high quality assets and the great responsibility that these funds hold in their hands, this article explores what could be considered as best practice for sovereign funds in how they build their reputation, develop trust and communicate effectively with all of their stakeholders.
Why are Communications Important — What can They Achieve if Done Well and What are the Consequences of Failing to Create a Clear Engagement Plan?
Looking at it from the professional investor point of view, why would communications be important to them? Surely the GP is in the driving seat when it comes to deploying capital? However, as the current situation stands, with so much money looking for superior returns, looking for a home essentially, it's not as simple as that. The onus is on the investor to prove that it is the right partner – responsible, professional, able to add value, etc. If you get these things right then experience suggests that the good opportunities will find you.
Sovereigns have one of the most complex stakeholder groups of any fund. Their main stakeholder group is the people whose money it is, to whom the investment outcome really matters — the general public. This group of people have high expectations when it comes to holding those in charge to account. They are highly motivated and the speed at which they can gather and express their disapproval using the social media tools available to them, for example, has changed the way in which we, as professional communicators, think about this, forever.
As sovereign funds look more closely at the role they play in society, aligning their investment strategy to what’s important to their stakeholders, they too need to demonstrate they are doing the right thing whether that is socially responsible investing or supporting the economic development of their home market, amongst many other considerations.