A distinguished panel of industry leaders gathered at Vistra’s Hong Kong Executive Briefing to discuss the findings of the Vistra Friction Index: Turning Friction into Capital Flow (APAC PE/VC Edition 2026) and what it means for the future of private capital across APAC. The event brought together perspectives from fund managers, legal advisors, regulators, compliance specialists and auditors to examine the challenges and opportunities shaping the region’s private equity and VC industry.
Regulatory Updates
September 10, 2026
Key Takeaways - Hong Kong Executive Briefing: Turning Friction into Capital Flow
From Opportunity to Execution
A key theme throughout the discussion was that, while APAC continues to offer compelling investment opportunities, the market is increasingly defined by execution rather than access alone. Investors today must navigate regulatory complexity, governance requirements, liquidity pressures, operational demands and evolving exit environments.
Hong Kong was highlighted as a market that combines relatively low friction with strong institutional infrastructure, making it a strategic base for private capital deployment across the region.
Why Hong Kong Continues to Matter
Panelists discussed Hong Kong’s unique advantages, including:
- Proximity to Mainland China and the Greater Bay Area
- Deep and liquid capital markets
- A growing family office ecosystem
- An established professional and financial services infrastructure
- Regulatory transparency and consistency
- An expanding Limited Partnership Fund (LPF) framework
The panel observed that Hong Kong is no longer viewed solely as a gateway to China but increasingly as a sophisticated regional platform for capital formation, investment management and value creation.
Building a Stronger Investment Ecosystem
The discussion also explored how Hong Kong can further strengthen its position by developing a more complete innovation ecosystem.
While the city benefits from world-class universities and research capabilities, speakers noted the need for stronger commercialization pathways; greater connectivity between founders, investors and corporates; and better access to growth-stage funding. The Greater Bay Area’s manufacturing and industrial capabilities were highlighted as an important opportunity for scaling innovative businesses.
The Rise of Onshore Fund Structures
Fund structuring and taxation emerged as another major topic.
The panel highlighted growing adoption of Hong Kong’s LPF regime, driven by operational efficiencies, regulatory alignment and evolving tax incentives. Speakers noted that industry trends show an increase in favoring onshore structures, as historical offshore advantages continue to diminish. Recent policy developments are expected to further enhance Hong Kong’s competitiveness for fund managers and investment professionals.
Aaron Weiss: Governance, Compliance and Substance Matter
Aaron Weiss, Managing Director and Head of Asia for Kroll’s Financial Services Regulatory Compliance practice, shared perspectives on the changing regulatory landscape facing private capital managers.
Aaron emphasized that regulatory expectations in Hong Kong have evolved significantly in recent years. Licensing requirements have become more rigorous, and firms are expected to demonstrate genuine operational substance, rather than relying on legacy structures or regulatory exemptions. Managers must ensure that their governance frameworks, responsible officers, compliance functions and operational controls are appropriately designed and actively maintained.
He also highlighted increasing scrutiny in liquidity management, valuation governance and risk oversight, noting that both regulators and investors expect firms to demonstrate clear processes and accountability. These capabilities are becoming critical for managers seeking to maintain credibility and deliver successful exits in an increasingly demanding market environment.
Exit Strategies Remain Top of Mind
As fundraising and liquidity conditions remain challenging, the panel discussed how firms are evaluating multiple exit pathways, including IPOs, strategic sales, sponsor-to-sponsor transactions and secondary solutions.
Successful exits increasingly require long-term preparation, robust governance and strong operational performance. The panelists agreed that managers must build optionality into portfolios early, ensuring they can adapt to changing market conditions while maintaining investor confidence.
Looking Ahead
The session concluded with a shared view that Hong Kong remains well positioned to play a leading role in Asia’s private capital landscape. However, future success will depend on the industry’s ability to reduce friction across the entire investment life cycle, from capital formation and fund structuring to governance, value creation and exits.
The message from the panel was clear: In an environment where opportunity remains abundant, the firms best positioned to succeed will be those that combine strong execution, governance, innovation and operational excellence to turn friction into capital
Panel Speakers
- Calvin Lam, VMS Group
- Aaron Weiss, Kroll
- Jingjing Jiang, King & Wood Mallesons; Hong Kong LPF Association
- Clement Yeung, EY
Moderator
- Christine Wang, Vistra
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