Private equity exit strategy: Hong Kong as an IPO hub

Hong Kong is transforming itself to become a global initial public offering (IPO) centre. According to Hong Kong Exchanges and Clearing Limited (HKEx), Hong Kong has led the world as the major IPO centre for the last two years. Of the Hong Kong IPOs completed in 2010, 45 per cent of the proceeds came from overseas companies’ IPOs while the IPOs of Mainland China companies contributed to 50 per cent, with the remaining 5 per cent raised by Hong Kong-based companies. These figures signify Hong Kong is the exchange of choice for many global investors and issuers.

While Hong Kong may be seen as the gateway for Chinese companies to raise funds, the HKEx is actively diversifying with listings by issuers from major international markets. As noted in the HKEx’s Quarterly Report for September 2011, one of its key strategic goals continues to be attracting more international companies to list in Hong Kong. A review paper of the global and local securities market in 2010 published by the Securities and Futures Commission also notes that HKEx attracted companies from various parts of the world, including Brazil, France, Germany, Mongolia, Russia, the US and the UK. This trend continued to build momentum in 2011. In June 2011 alone, two well-known international companies, Prada and Samsonite International, chose Hong Kong over other exchanges to list their shares.

Hong Kong will continue to be a favourable venue in the world for IPOs. Being part of China, Hong Kong is unique with its common law jurisdiction and legislation that provides market transparency and protection for investors. More companies and investors are also recognising Hong Kong as an international financial centre.

IPOs have always been one of the exit strategies for private equity funds and Hong Kong offers a unique and popular platform for international companies to list their shares.

Key Contacts

Rhoda Yung

Partner | Corporate Finance

Email or call +852 2825 9624