HKMA seeking new head of direct investment

Hong Kong’s de facto central bank is seeking a new head for its long-term growth portfolio team after the incumbent leader quit, AsianInvestor can confirm.

Huh Yong Hak, a Korean national who had worked at the Hong Kong Monetary Authority (HKMA) for more than six years, resigned for personal reasons effective on July 23, confirmed an HKMA spokeswoman.

“We are looking for a suitable candidate to fill the post as soon as possible,” she added, saying it was following its customary practice to examine both internal and external candidates.

The spokeswoman noted that Francis Chu (pictured), executive director of reserve management, had doubled up to lead the long-term growth portfolio team in the interim.

“A robust system has been in place for the sourcing, assessment, conduct of due diligence and post-investment monitoring of investment opportunities,” she said. “We have made administrative arrangements to ensure minimal impact on the normal operation of the investment activities.”

Huh had been running a unit investing directly into private equity and real estate. Officially he was head of the direct investment team 2, which runs the long-term growth portfolio.

This unit has been driving HKMA’s returns*. The Exchange Fund that HKMA runs recorded an unaudited return of 2.7% for 2013. This encompassed 4.9% for its investment portfolio and 15.9% for its long-term growth portfolio (private equity and real estate).

The Exchange Fund’s chief expansion has been into global equities, which account for 12.3% of its asset base, and alternatives including real estate and private equity (4.4%).

At a press conference this January held to announce the unaudited results, HKMA’s chief executive, Norman Chan, pledged to continue diversifying into private equity and real estate, which are less sensitive to interest-rate movements.

“We still have headroom to invest in our long-term growth portfolio,” he told AsianInvestor at the conference. “That will involve awarding private equity mandates to selected managers. We are achieving satisfactory results so far, so additional mandates will be granted this year.”

Given satisfactory results, Huh’s departure can be seen as a surprise, with the division having become increasingly important for HKMA diversification.

Huh was one of two heads within the division. The other remains Edmund Ng, who heads team 1 investing directly into G3 government bonds. It has also been branching out, including into emerging sovereigns. Both direct investment teams come under reserves management head Chu.

Prior to joining HKMA Huh served as managing director and head of the financial institutions group and Korea for HBSC Investment Banking. He has also worked as a managing director at both Olympus Capital Investments and at JP Morgan, where he spent 18 years.

* See the cover story on HKMA from AsianInvestor’s March 2014 magazine edition.