HOUSE OF REPRESENTATIVES

H.C.R. NO.

82

TWENTY-THIRD LEGISLATURE, 2006

  

STATE OF HAWAII

  
   

HOUSE CONCURRENT

RESOLUTION

 

SUPPORTING THE DEVELOPMENT OF THE FUND MANAGEMENT INDUSTRY IN HAWAII.

 

 

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 twenty years; and

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

WHEREAS, Hawaii shares many of the same attributes with Australia and has certain attributes that make it even more attractive as an Asia-focused capital market and fund manager base of operations, including:

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

(2) 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) A resident population that has a long and strong historical connection to many Asian countries and is readily 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; and

WHEREAS, the vast majority of Hawaii's financial assets are currently managed by firms outside of Hawaii; and

WHEREAS, Hawaii does not enjoy the benefits of the profits, jobs, and ancillary support services related to the management of Hawaii's financial assets currently managed by firms 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; and

WHEREAS, Hawaii's existing fund management industry is small but growing; and

WHEREAS, 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-Third Legislature of the State of Hawaii, Regular Session of 2006, the Senate concurring, that the Legislature supports the development of the Asia-focused fund management industry in the State of Hawaii and acknowledges the benefits that the development of the fund management industry would bring to the State; and

BE IT FURTHER RESOLVED that the Legislature 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 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.

 

 
 

OFFERED BY:

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Report Title:

Fund Management Industry in Hawaii