H.C.R. NO.


















     WHEREAS, cities that are home to major financial markets enjoy higher tax revenues and higher median income per capita; and


     WHEREAS, on a global scale, Asian economies and their related capital markets represent the largest opportunity for economic growth over the next ten to 20 years; and


     WHEREAS, Australia has recently surpassed Hong Kong and Singapore as the growth market for Asia-focused fund managers due to attributes, such as:


     (1)  A western legal and regulatory system;


     (2)  A relatively low cost of operations including office space and labor; and


     (3)  A favorable time zone and climate;




     WHEREAS, while sharing these attributes with Australia, Hawaii has additional attractive attributes to be an Asia-focused capital market and fund manager base of operations, including:


     (1)  Being a sovereign state within the United States of America;


     (2)  Being in a time zone that allows managers to operate within the normal business hours of both New York and major Asian financial markets without undue hardship;


     (3)  Having a resident population with a strong historical connection to many Asian countries and that is familiar, comfortable, and compatible with Asian ethnicities, customs, and traditions; and


     (4)  Being a world famous resort and travel destination and a favorite place to raise a family or retire due to many other "quality of life" attributes;




     WHEREAS, the vast majority of Hawaii's financial assets are currently managed by firms outside of Hawaii, thereby depriving Hawaii of the benefits, including profits, jobs, and ancillary support services, presently enjoyed by firms managing Hawaii's financial assets outside of Hawaii; and


     WHEREAS, there is virtually no downside to cultivating an Asia-focused fund management industry in Hawaii because the industry:


     (1)  Is not capital intensive and does not consume valuable resources including land and raw materials;


     (2)  Does not produce any byproducts harmful to the environment or conflict with any local cultural practices;


     (3)  Does not require an initial investment of state resources or development of special infrastructure; and


     (4)  Will have little impact on Hawaii's traffic situation due to the relatively low ratio of personnel to assets under management and the hours of the Asian financial markets;




     WHEREAS, Hawaii's existing fund management industry is small, and Hawaii residents, and native Hawaiians in particular, are severely underrepresented in this very lucrative and high paying industry; and

     WHEREAS, development of an Asia-focused fund management industry in combination with specialized training and internship programs at the high school and college level could have many positive benefits for Hawaii, including:


     (1)  Providing the opportunity for Hawaii residents to participate in the growth of the industry;


     (2)  Allowing many Hawaii-born persons who are working in the fund management industry abroad to return home, yet maintain their financial lifestyle, to help develop the industry and be near family and friends;


     (3)  Providing Hawaii financial asset owners the opportunity to select from a larger pool of locally-based asset managers and, given comparable returns, to invest a larger portion of their financial assets with local managers, spurring organic growth in addition to imported growth;


     (4)  Diversifying Hawaii's economy;


     (5)  Producing additional tax revenues for the State of Hawaii;


     (6)  Increasing the median income level of Hawaii residents;


     (7)  Providing the opportunity for more rich, robust, practical interaction between educational institutions teaching finance and the finance industry, via an increased number and variety of internship opportunities;


     (8)  Providing the opportunity for Hawaii to boost and diversify tourism by becoming a major hosting participant in the multibillion dollar industry of Asia-focused financial conventions, forums, and special events;


     (9)  Creating demand for new services necessary to support a burgeoning financial industry, such as securities related information technology specialists and programmers, securities attorneys, auditors, compliance officers, administrators, and prime brokers; and


    (10)  Attracting the best and brightest financial educators with specific interest in the Asian financial markets to seek employment in Hawaii's educational institutions;


now, therefore,


     BE IT RESOLVED by the House of Representatives of the Twenty-sixth Legislature of the State of Hawaii, Regular Session of 2011, the Senate concurring, that this body supports the development of the Asia-focused fund management industry in the State and acknowledges the benefits that the development of the fund management industry would bring to the State; and


     BE IT FURTHER RESOLVED that this body respectfully requests the Governor and executive department agencies and other stakeholders to work together to develop a strategy for the establishment, maintenance, and growth of the fund management industry in Hawaii; and


     BE IT FURTHER RESOLVED that this body respectfully requests the Department of Business, Economic Development, and Tourism to:


     (1)  Establish a task force to formulate strategies for the development of an Asia-focused fund management industry in the State; and


     (2)  Report its findings and recommendations to the Legislature no later than 30 days before the convening of the 2012 Regular Session;



     BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Governor, the Speaker of the House of Representatives, the President of the
Senate, the Director of Finance, the Director of Taxation, the Director of Business, Economic Development, and Tourism, the Hawaii Securities Industry Association, and the Director of Commerce and Consumer Affairs.









Report Title: 

Fund management industry in Hawaii