Chief Executive Officer of the Hong Kong Investment Corporation Clara Chan Ka-chai is on Straight Talk this week.

Chan explains in full detail about the HKIC's dual mandate, its "1-2-3-4" framework, and it's "3As" principle in commercialization.

Check out the full transcript of TVB’s Straight Talk host Dr Eugene Chan’s interview with Clara Chan:

Eugene: Good evening! I'm Eugene Chan on Straight Talk, and we are joined by the Chief Executive Officer of the Hong Kong Investment Corporation, Clara Chan. Appointed in October 2023, Chan brings a wealth of experience from both the public and financial sectors. She previously served as the executive director of Monetary Management at the Hong Kong Monetary Authority, and earlier as chief investment officer for private markets. Clara is a barrister and a globally recognized voice in responsible investing. She has received multiple accolades, including the “Asia Industry Leadership Award by 100 Women In Finance” and a place on “Private Equity International Global 40 Under 40” list. Welcome, Clara!

Clara: Hi, Eugene! Thank you for having me today.

Eugene: I'm very happy to have you finally. We've been trying to organize this and as Hong Kong Investment Corporation is a new entity for the Hong Kong community. As the HKIC was initiated by the chief executive in his 2022 Policy Address, it was seen as a bold and strategic move, power sort of administration, because we want to channel our capital for returns and real impact on the Hong Kong economy as well as the society. Maybe we can start by asking you: how would you describe HKIC’s mandate?

Clara: Well, I think it's a very rewarding and meaningful journey for the HKIC in not only witnessing but also being a part of Hong Kong entering into a new chapter for growth and to grow from strength to strength in the past few years. In terms of the HKIC's mandate, we always internally use the framework of “One”, “Two”, “Three”, and “Four”. So, let me perhaps also share a little bit more. “One” really means one Hong Kong team, because for the HKIC, we work very closely with various bureaus of the government in terms of pursuing our objective. So, that's “One”. “Two” is the dual mandate. We always talk about investing for the future of Hong Kong, but we have two key dimensions in mind. So, “One” is definitely to bring long-term financial return. At the same time, we also want to bring strategic value addition to Hong Kong could be by way of enhancing the long term competitiveness of Hong Kong and also the economic vitality. So, with “One” and “Two”, we move to “Three”. “Three” actually defines the key investment themes. We have three currently. One is hard and core technology, and then we have biotech. And last but not least, we have new energy, or what we call the green technology. And as you can see, for all three, we have a very common thread linking all of them. So, all of those are really about innovation and technology, which we firmly believe would drive the future growth. So, then we come to “Four”. We always believe in the four winning elements for the HKIC in Hong Kong. So, what are we going to do to play to our strengths? So, those could be capital talents, innovation and technology, and also being international. So, the HKIC as capital, we bring more than capital, and with Hong Kong’s strength, we always try to link up capital, talents, innovation technology, and bring all those good stories to the global stage.

Eugene: Clara, thank you for making it so simple.

Clara: Yes.

Eugene: I'm sure it's much more complex than that. So, how does it differ from other investment arms of the Hong Kong government?

Clara: Well, I think we actually focus on a few things. First of all, in terms of investing for the future, financial return, long-term financial return is very important. And if you look at how we pick our themes, as we said, innovation technology is the key. But we do more than that. We link those companies up with our capital market and then help them grow. So, it's not only about investment, the money, the monetary amount, how much we put in, but after we put in the money, we try to bring our other resources, not only from HKIC, but the rest of the government, to support these companies to grow. So, I would say that starting from innovation and technology. But what we try to do is really, we try to bring the Hong Kong entrepreneurs, those great ideas, with Hong Kong DNA, to the global stage. We also try to build great brands with Chinese wisdom, again, onto the global stage. But at the same time, we are open, we are welcoming and also facilitating to bring good talents and good companies from around the world to take root in and also develop in Hong Kong.

Eugene: Right, Clara, as you said earlier, you have kind of a dual mandate, I would say, meaning generating returns and also nurturing growth firms. So, when you make your investment choice, how do you actually prioritize between these two goals? Because I'm sure every business will have a different weight on either. So, how would you make a decision on that?

Clara: All of these different elements go hand in hand. So, definitely investing for the future, we need to look at, by professional way, how financially sound and what the financial potentials of a company are. Because if we talk about innovation technology, that means nothing if that doesn't go to the commercialization stage, if that doesn't really have touch points with the community and with the local economy. So, that's the starting point, right? But at the same time, we need to look at the strategic benefits, because after you make the investment. So, if we only look at financials, it's only like two points, you make the investment, and then until the time you exit, and then you kind of get the number of your return. But what we do is definitely much more than that. In terms of the journey of bringing strategic investment, right after our investment, we have very clear requirements for how these companies, these partners, are going to bring impact or contributions. I could give you a few examples. So far, we have already invested in more than 100 companies, and for every dollar we invested in, we brought together, and we kind of leverage more than four dollars from long term market capital in the same company, or to the Hong Kong economy and all of these companies, what we require them to do would include number one, to make sure that they do R&D in Hong Kong, and then when they have IPs, well, they could be co-developing those with our universities or other like research and development sectors, the R&D institutions. And after they developed the IP, they registered those in Hong Kong. And when they continued out their growth journey, a lot of these companies, they actually moved their headquarters to Hong Kong, or they hired more people in the I&T sector. Equally importantly, after our investment, there are real examples showing that the companies grow stronger and they grow faster than expected. So, out of the more than 100 projects we invested in, around five to 10 companies already indicated their plans to file for Hong Kong IPO this year. So, I think this is also bringing a good dual flow of companies, good companies in the stock market. And one other data point is for the companies that we invested in, for those who have been in the next round of financing. So, basically, we see the majority of them having up rounds, which in other words, means, after we invest, after we help them grow, they are growing stronger and they're attracting even more investment interest from around the world, meaning that they have higher valuations.

Eugene: Clara, thank you for really explaining to us how you prioritize between those dual sorts of mandates. But some argue that sovereign funds, like a Hong Kong fund, should focus solely on returns, not development. So, why does HKIC have this role to look at that and how critical do you think this is for Hong Kong?

Clara: I think “return”, we have to interpret it in a broad sense. “Return” could mean financial return, but if you look at the long term development of Hong Kong, economically, socially, we need to bring more than financial return. And we do see that we have a role, the HKIC could play an active role. So, for example, when recently we actually hosted an event called the IPC, the International Forum for Patient Capital. A lot of those patient capitals, which could be sovereign wealth funds, pension plans and family offices, universities and governments from around the world. In gist, they are long term investors, high quality institutional investors, who carry with them a lot of money and also the interest and appetite to deploy capital. For us, we think that our role is not only to focus on individual projects that we pick and that could bring up good financial return, but we could also link these capital buckets up with these opportunities for two main reasons. One, definitely with more capital, more supporters, these companies, we increase their possibility of success, which is good this win-win-win situation. And on the other side, we also channel more capital flow to Hong Kong, which is showing a good type of validation of what Hong Kong could do in terms of a super connector and also a super value adder. So, I think we do see by actual practice that we could definitely bring more than a financial return.

Eugene: Clara, in Straight Talk, we ask direct questions. I'd like to get one to you before the break. You know, during the Cathay Pacific bailout, you earned the nickname of “Little Chili” for driving very tough deal under huge pressure. Looking back, I'm sure this has prepared you well for this post at the HKIC. So, are we going to see more of that “little chili approach” in how you invest in the city's wealth?

Clara: I think we have an open and welcoming approach in terms of trying to cast our net wide enough so that we get the best wisdom. We get the best partners and companies from around the world. At the same time, when we talk about screening, due diligence and trying to do negotiation to protect Hong Kong's interest, we would always make sure that we stick to our very high threshold, and that's very simple, just for the reason that we need to get the best deal for Hong Kong.

Eugene: Okay, let's go for a quick break now, and we won't be long and don't go anywhere.

Eugene: You are watching Straight Talk with Eugene Chan. And we are back with Clara Chan, the chief executive officer of the Hong Kong Investment Corporation, talking about HKIC can enhance our city’s wealth. So, thank you so much for explaining from “1-2-3-4”, in such a way that I am sure the viewers will know what you are trying to achieve for us. Out of the three main themes you talked about, such as hardcore technology, biotech and new energy, and PICK by HKIC, which one would you like most and why?

Clara: We actually like all of them.

Eugene: Really?

Clara: Because first of all, all of them align well with the government's vision to support strategic industries and to bring growth to Hong Kong’s economy. And from the investment prospective, I would also say that all of them are clear showcase of what we should focus on because they are all innovation and technology trends, which we believe would shape the future’s world, and also would bring good growth momentum for the future, not only in Hong Kong, but also globally. And I believe that this is not only a view shared by the HKIC, but when we talk to our long-term investors, peers from around the world, which we often term as the “patient capital community”. All of them also share the same view.

Eugene: Since you mentioned the word “patient capital”, I am sure many viewers will start thinking kind of a typical doctor-patient relationship. But I am sure that is not the case. So, what is actually this “patient capital” and how does that relate to Hong Kong?

Clara: Patient capital is a term quite widely used globally in recent years. And that effectively means the investors who are long-term, high quality, and basically institutional investors who carry with them what we call “long-termism”. So these investors usually, their mandate, their investment mandates transcend cycles, and also generations. And they have better flexibility to invest for the future. And therefore when we always talk about innovation and technology, these themes, they are well fitted to do the investments.

Eugene: Right.

Clara: Because of the reason that if we look at innovation technology, a lot of those great ideas, they need to go through the “0 to 1 process”, which could take years. And after “0-1”, you want to bring them to commercialization and iteration, etc. So, those could take a pretty long time. And therefore, by being patient, being long-term, that really matters, in terms of investing in those sectors.

Eugene: Right. Clara, two common questions from market are: do you only invest in companies originated in Hong Kong? And also to you only invest in private markets?

Clara: Right. We have a very, very broad mandate. And we always believe of being smart, agile.

Eugene: I see.

Clara: And this is very important for us to really navigate in the investment market. So, the short answer to you is we actually look internationally. And this is, I think, the strength of Hong Kong. Not only the HKIC, but Hong Kong as a whole. So, we cast a net as wide as possible, and we invest definitely in startups, in companies from Hong Kong, but also beyond Hong Kong. And this is particularly important for innovation technology, which, as I said, we believe are driving the future growth because you can imagine cutting edge technologies, disruptive technologies, those innovations, teams, they could happen anytime, anywhere around the world. And therefore it is better to keep ourselves in the know. And to make the best choice, in terms of what to invest. And I think the second area is the fact that we definitely want to be ahead of the game.

Eugene: I see.

Clara: So, having … kind of casting the net wide, and being able to be flexible and agile, not only across capital structure, but also being able to invest in not only the private market, but also the public market would be very important for us.

Eugene: Clara, the HKIC is often compared to Singapore’s Temasek, which often favors local investments. So, should we do the same? Or you think that would undermine Hong Kong’s global appeal if we do that?

Clara: I think Hong Kong will always have differentiating niches on the global stage. And it is actually benefitting from Hong Kong’s differentiating attributes. At the HKIC, we map out our mandate, and then we take forward our work. So, I would say that definitely, we would like to stick together with, what we call the “1-2-3-4” framework. In terms of the two that we mentioned on the basis of the one Hong Kong team thinking, we would like to drive both financial return and strategic return. We earlier explained why we think the two actually go hand in hand, and we continue to believe so. And I will give you some examples in terms of why we think these beliefs actually would come into the reality. For example, for one investment we made, it is called … it is public information, it is called “Phase Scientific”. So, basically it is kind of Hong Kong founder, and they were able to come up with a range of products. And one of the most recent and successful one is about using urine to test HPV. So, this is something from local. But we see that that also brings strategic benefit to the society, and also not only to Hong Kong, but also to the rest of the world because of a few reasons. Well, that is definitely biotech, right?

Eugene: Right.

Clara: Number one: previously, I think, to detect HPV, you basically need to go to clinic and have pretty invasive way of checking. But by the urine base type of test kit approach, it is non-invasive, it is efficient, and it is also, in terms of pricing, very affordable. And I could also share with you that for HPV is not only affecting female, male could also have HPV. So, basically it is also not only helping females, but also helping males, in terms of having an alternative approach to testing HPV. And this is not the end of the story. When we talk to many others from around the world, two key takeaways. They really love this story and love to make investment. Number one, even for developed market where they could have different ways of testing HPV, but most of them are invasive. A lot of places are not like Hong Kong. For us, we have a very, like easy, transportation system, so we could easily get to the clinic and do the test. But for many of them, even in developed markets, they might need to take a train, two hours, go to the clinic and do the test. So, having that take home urine-based test is very convenient, affordable, and, as I said, non-invasive for them – for both males and females. And if you shift the focus to other parts of the world, some of the other jurisdictions, because of cultural reasons, religious reasons, particularly for female, they cannot have invasive way of testing HPV.

Eugene: I see.

Clara: So, I think what we have currently from this local story, in terms of bringing to the rest of the world is a great example of, I think, how we could bring Hong Kong DNA to abroad.

Eugene: Right. Since you brought up our Hong Kong … if I remember, within a couple of months, we had the WeLab Bank, Simon Loong coming up, it is also a Hong Kong business as well. I mean he is expanding the digital banking to not only Hong Kong, but mainland and the Southeast Asia. So, those are the type of companies that you would look at to invest, isn’t it?

Clara: Yes, we have been casting our net wide. And as you just mentioned, we actually have high threshold of picking different partners and projects. Basically they have to fit our dual mandate, they have to be falling within our key themes, and also bringing good to Hong Kong's future, in terms of the economy and the society. So, names like WeLab, and also some others, we have another, for example, Spark EV, Emaldo, and a number of those. All of them are great stories from either Hong Kong or this part of the world. And they have been expanding well, in terms of their business to, for example, mainland. And also a lot of them are to global south, Southeast Asia, for example. So, like WeLab, they have been doing well in Indonesia and Thailand. Spark EV, we mentioned, we help them to link up with the state owned of enterprise in Thailand, and then to also help with Thailand’s green transition. For Emaldo from this part of the world, they are already expanding their footprint and doing good business in Europe. So, we are definitely hope to continue our effort to bring good stories from Hong Kong.

Eugene: Right. As we know that the HKIC was established in 2023, and sounds like our progress has been doing very well. You said we have invested in over 100 companies. So, from your point of view, are you content with it? Or is there any areas that you think your team and yourself can push further?

Clara: Well, we are wholly owned by the government. And thanks to the government’s support, I think we are moving really full steam ahead. Not only on the quantity of the projects, but also on the quality. Apart from doing more than 100 projects, we are trying to bring more capital through the channeling force of what the HKIC does to Hong Kong. So, we earlier mentioned that for every dollar we invested, we were able to bring more than 4 dollars from long-term market capital, also to Hong Kong or through Hong Kong, to mainland or other parts of the market. And if I look ahead, on the basis of what we have done, there are a couple of focuses that we are pushing ahead with, particularly this year in 2025, mainly three. The first one is commercialization. I think it is very important to be cognizant of the fact that innovation technology is very important. But it is equally important for us to focus on the right projects and companies, and also accelerate the way of transformation from the innovation incubation to coming up with new products or services, which could have a touch point with society.

Eugene: Right.

Clara: So, on that commercialization front, we also have an easy framework, we always term it as the “3 As”, to make sure that the companies we invested in, and the partners that we invested with, they have that very dear to heart.

Eugene: Right.

Clara: So as to guide them, in terms of their journey. So, the “3 As” are Applicable, Accessible, and Affordable, meaning that when you come up with something new, make sure that that is applicable to help the general public, to solve some of their pain points, and make sure that it is easy for the users or the general public to access to, so that they could use that product and service. And at the same time, try to bring down the price, so that it is affordable. So, that is the commercialization side. The second point is about really translating the investment effort into tangible benefit to Hong Kong’s economy and society. We mentioned about some companies are already filing IPO, and they could kind of go to our stock market, be listed there very soon. And we are coming up with many of those new stories, so we will continue that effort. And apart from that, we also require many of our companies and partners to set up base in Hong Kong, to hire talents from Hong Kong, to work closely with our universities. So, all of those, we are going hand in hand.

Eugene: Okay.

Clara: And apart from that, the very last point is also very important, it is international collaboration. So, I mentioned that because I think this is part of the HKIC’s strength. In terms of doing not only investment, but also be able to bring those stories to the global stage.

Eugene: Right. Thank you, Clara, for sharing with us what the HKIC does for Hong Kong’s future. As we have heard tonight, the Hong Kong Investment Corporation is not just about growing capital, it is about enhancing our city’s wealth in a broader sense, driving innovation, creating opportunity, and shaping a more resilient economy. That is all from Straight Talk from me, Eugene Chan, and see you next time.