The Hong Kong government will set up a HK$10 billion ($1.2 billion) fund-of-funds (FoF) to invest in the innovation & technology (I&T) sector in a move to boost the city’s standing as a technology hub, according to an announcement.
The FoF, dubbed the I&T Industry-Oriented Fund, will inject capital into the life and health technology, AI and robotics, semiconductors and smart devices, advanced materials, and new energy sectors.
The fund was announced at chief executive John Lee Ka-chiu’s annual policy address on Wednesday. Lee added that HK$1.5 billion ($193 million) from the Innovation and Technology Venture Fund (ITVF), which was established in 2017, will be redeployed to set up funds that will invest, on a matching basis, in startups.
Hong Kong set up ITVF as a HK$2 billion ($257 million) vehicle to directly co-invest alongside venture capital firms in the city’s local I&T startups. Its list of co-investment partners includes MindWorks Capital, Qiming Venture Partners, and Isola Capital. The fund has invested HK$302 million ($38.3 million) across 37 I&T startups, according to official data.
Meanwhile, the city’s wealth fund, the Hong Kong Investment Corporation (HKIC), will continue to lure I&T firms to establish their operations in Hong Kong with investments, Lee said. The fund kicked off direct investments this year. So far, it has invested in SmartMore, Galbot, BioMap as well as its first overseas funding in Thailand’s Spark.
The announcement follows a series of measures by the government to bolster investments in the private sector. HKIC was established two years ago at a policy address, intended to use the government’s financial reserves to invest in hard and core technology, biotech, as well as new energy and green technology. The wholly-owned government fund is regarded as Hong Kong’s parallel to Singapore’s Temasek.
