Hong Kong Jockey Club boosts alternatives investments

The sharpest increase was recorded in the club's trust, which supports charitable organizations and community projects in Hong Kong. Investments in private equity, hedge funds and private real estate by the trust's capital fund jumped from HK$3.7 billion ($477 million) in 2013 to HK$5.3 billion in 2014, well outpacing increases for other asset classes. Total long-term investments, including deposits and funds awaiting investment, stand at HK$8.9 billion, according to the club's annual report.

The trust also has an allocations fund with a shorter-term horizon that is used for charitable donations. Its alternatives holdings were more or less flat at HK$1.4 billion. The trust has total capital under management of HK$26.3 billion.

The club also invests in alternatives outside of the trust, maintaining a long-term investment portfolio and a contingency fund. While the contingency fund's alternatives exposure went from zero to HK$621 million in 2014 - out of a total fund size of HK$3 billion - holdings in the long-term investment portfolio rose to HK$5 billion in 2014, up from HK$4 billion the previous year. The overall long-term portfolio is worth HK$8.2 billion.

"We have purchased properties for some time already," Eric Li, the Jockey Club's steward, told the South China Morning Post. "The Jockey Club also has increased other types of alternative investments to diversify our portfolio from traditional bonds and equities investment. This helps diversify the risks and bring in better returns."

The trust donated a record HK$3.6 billion in 2013-2014, up from HK$1.9 billion the previous year, while the club contributed HK$19.6 billion in betting duties and tax to the public purse. This came on the back of strong commercial revenues, with horseracing turnover rising 10% year-on-year to HK$103.9 billion, football betting turnover jumping 22.9% to HK$62.2 billion and Mark Six Lottery turnover reaching HK$7.9 billion, up 3.7%.

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