Report: HKMA increases exposure to PE

The Hong Kong Monetary Authority has reportedly backed KKR and approached Bain Capital and Blackstone.

Kohlberg Kravis Roberts is one of the private equity firms to have received commitments from the Hong Kong Monetary Authority (HKMA), a government authority responsible for maintaining Hong Kong’s monetary and banking stability, according to a report in the Financial Times.

HKMA is also either in talks with or has already committed capital to Bain Capital and The Blackstone Group, the report noted.

All three private equity firms and HKMA declined to comment.

Since 1983, the monetary authority has been legally bound to back the Hong Kong dollar with US dollars to maintain the currency peg, compelling it to adopt a conservative investment strategy. However, now, with its US dollar reserves exceeding the amount required to back its currency, HKMA is looking to take a bolder approach to investments.

HKMA, which according to the FT currently manages HK$1,560 billion (€147 billion; $201 billion), is looking to increase its exposure to alternative assets including hedge funds and private equity, the report stated.

The Hong Kong Monetary Authority Investment Portfolio was formed in 1998. It manages a portfolio of investments including equities, fixed income and alternative investments, according to data provider PE Connect. It is already an investor in private equity funds.