Core Viewpoint - The private equity industry in China is undergoing rapid internationalization, with a significant increase in the number of licensed private equity firms in Hong Kong, indicating a shift from a trial phase to a new cycle of global competition [1][2]. Group 1: Growth of Licensed Private Equity Firms - As of November 26, 2023, there are 107 licensed private equity firms in Hong Kong, marking a historic milestone of surpassing 100 firms [1]. - In 2023, 10 new firms received licenses, with a balanced distribution between subjective and quantitative private equity firms, each contributing 5 firms [2]. - Among the licensed firms, those managing over 10 billion yuan dominate, with 35 firms managing over 100 billion yuan, accounting for nearly 50% of the total [2]. Group 2: Characteristics of Licensed Firms - The majority of licensed firms are subjective private equity firms, totaling 69, which represents over 60% of the total [4]. - Quantitative private equity firms account for 28 firms, approximately 26.17%, while mixed firms (subjective + quantitative) make up 10 firms, less than 10% [4]. Group 3: Drivers of Internationalization - The leading private equity firms are becoming the main players in cross-border operations due to their substantial financial resources, which allow them to absorb the high initial costs associated with compliance and market entry [3]. - There is a strong demand for global asset allocation among institutional investors and high-net-worth individuals, providing a natural client base for private equity firms looking to expand internationally [3]. - The stringent regulatory requirements for cross-border operations favor larger firms that have accumulated compliance advantages over time [3]. - Expanding into overseas markets is seen as a strategic necessity for private equity firms to overcome domestic competition and explore new growth avenues [3]. Group 4: Future Outlook - The trend of private equity firms accelerating their global expansion is expected to continue, driven by the need to diversify risks and enhance service capabilities to meet growing investor demands [7]. - The deepening integration of Hong Kong's financial market with mainland China's asset management industry is anticipated to create new opportunities for cross-border business expansion in the next 3 to 5 years [7].