Market Intelligence

Asia’s fund finance market continued to mature and diversify in the first half of 2026. New transactions completed by June 2026 represented a total deal value of approximately USD 1.64 billion, with new-money volumes increasing by approximately 20% year-on-year.

Herbert Smith Freehills Kramer’s quarterly review of private capital buyouts, fundraising and disputes tells a familiar story for the first half of 2026: subdued on-market play with flashes of brilliance.

A quiet first half for Asia private capital, with both fundraising and buyout activity subdued, and no indication whether a second-half rebound will materialise as in recent years.

Hong Kong's Securities and Futures Commission has introduced stringent new requirements for publicly offered funds investing in virtual assets, establishing a 10% net asset value threshold, prohibiting fund-level leverage, and mandating cold-wallet storage with onshore key custody. Fund managers must now navigate tightened custodian arrangements and closely monitor their virtual asset holdings to ensure compliance with these evolving regulatory controls.

Hong Kong has reclaimed its position as a global leader in equity capital markets, with IPO proceeds reaching US$37.4 billion in 2025 and total ECM fundraising surging 164% year-on-year. The city's unique advantages stem from its Stock Connect infrastructure linking mainland Chinese exchanges, progressive regulatory reforms for technology and biotech companies, and its role as the only international financial center under common law with deep access to China's economy.

Hong Kong has dominated Asia's international bond market for nearly a decade, arranging over US$130 billion in international bonds in 2024 alone. What structural advantages, policy decisions, and legal frameworks have positioned this city to capture 30% of the regional market and establish itself as the world's premier offshore gateway to Chinese capital markets?