India’s Growing Wealth Belt Spawns A New Breed Of Managers

first_imgFive years ago, a cold call from Deutsche Bank changed Nagendra Venkaswamy’s life. A director at a Bangalore-based software firm, he was 40 years old and facing financial ruin. “After 20 years of working, I had spent all my money on gambling in the stock market,” he recalls. “All I was left with was my house and the equivalent of $200. My wife and child had no idea that I was absolutely broke.” The Deutsche Bank representative who called Venkaswamy helped him work on a plan to recharge his finances. “He held up a financial horoscope for me,” he says. “If I needed to survive, I had to change my habits.” The planner also offered an array of options that, among other things, helped him ensure his family’s financial security and steadily build an asset portfolio. “In six months I had recovered everything I had lost,” says Venkaswamy, who today is managing director of Indian operations at Juniper Networks in Sunnyvale, Calif.Until recently, wealth management for high net worth individuals was an almost unheard-of concept in India. Rising incomes and the unlocking of wealth from closely held businesses have created a whole new generation of individuals that constitutes a credible market opportunity for asset managers, private bankers, financial advisors and others. Simultaneously, new options for investing are emerging as well, including art, overseas investments and real estate venture funds.“The wealthy Indian has just recently started waking up to the concept of private banking,” says Sutapa Banerjee, senior vice president and head of Indian private banking at ABN AMRO Bank. Previously, most high net worth individuals (HNWIs) invested in a few asset classes, using their local brokers, chartered accountants or tax consultants. For wealth managers, “it is an extremely challenging task to break the traditional mindset” and convince HNWIs to embrace “an asset allocation methodology through a professional wealth manager,” she adds.“Traditionally, the wealth management market in India was served by those that cross-sold mutual funds and broker/banker products to mass affluents,” or individuals with liquid assets of between $50,000 and $300,000, says Leo Puri, managing director at private equity firm Warburg Pincus in New York City and a former director at McKinsey & Co. in Mumbai. “A true [wealth management] market is just beginning to develop.”Banerjee attributes the increase in the number of wealthy Indians to a combination of factors. For one, many are invested in the equity markets and have benefited from strong corporate results in recent years. Stock market earnings multiples are also riding high, and so is sentiment in the market for initial public offerings, she says. Promoters of Indian companies have also been able to unlock significant wealth through mergers and acquisitions, she adds.The ‘Wealth Belt’ ExpandsAccording to a report titled, “State of the World’s Wealth: 2006,” published by Merrill Lynch and French consulting firm Capgemini, the number of high net worth individuals in India grew 19.3% between 2004 and 2005 to 83,000, whereas the global average was 6.5%. The report also found that only 0.01% of India’s adult population is made up of HNWIs, which is a tenth of the Asia-Pacific average.By Puri’s estimates, India now has roughly 20 million urban households that earn $5,000 to $10,000 annually. Another six or seven million households earn between $10,000 and $100,000. Wealth managers are actively developing products and strategies to tap into those markets, says Puri. India has fewer than 100,000 individuals with a million dollars or more to invest, he says, using the international definition for HNWIs.But international yardsticks don’t lend themselves easily to the Indian market, says Kanwar Vivek, head of private banking at ICICI Bank, India’s largest private sector bank. “Inheritance is not a vital wealth forming segment here yet, unlike Europe which has been rich for 250 to 300 years,” he says. “In India, the people who are rich are those who own SMEs (small and medium enterprises) or LMEs (large and medium enterprises). It’s a booming market. The opportunity lies in increasing their wealth. We want to catch the group of clients who will be in the Rs. 4 to 5 crore ($1 million to $5 million) bracket tomorrow.” ICICI assigns a wealth manager to each client with an investment size of at least Rs. 1 crore (about $240,000).Deep-rooted cultural moorings – such as keeping money matters strictly private – are also giving way. “In India, money does not have sinful connotations anymore,” says Pradeep Dokania, managing director and head of the global private clients group at DSP Merrill Lynch. “India has always had a lot of enormously wealthy people such as landlords, royalty, rich farmers and traders,” notes Abhay Aima, head of the wealth management practice at HDFC Bank in Mumbai. “However, they traditionally did not discuss their assets with financial institutions.”Emerging Asset ClassesIndian HNWIs are beginning to explore investment opportunities beyond the traditional capital markets, migrating to newer asset classes such as art, real estate and overseas investment opportunities. Wealth management firms are targeting specific niches among them to avoid the clutter of competition. HDFC, for instance, is looking to service mass affluents, high net worth individuals and ultra high net worth individuals, but its focus is mainly on the first two. It is also pitching its services to wealthy non-resident Indian (NRI) investors who have done well overseas and are now looking to invest in a booming home economy. These investors are typically based in Singapore, Hong Kong, the U.K., the Middle East and the U.S.Smaller shops, too, have made a specialty in servicing overseas clients. Govind Pathak set up Acorn Investments Advisory Services three years ago and has formed a niche among U.S.-based high net worth clients. “All my advice is India centric,” he says. “People want alternative or supplementary advice that is not coming from product sellers such as banks and insurance companies.” Acorn’s minimum requirement for a client’s investment check book is Rs. 25 lakh, or about $60,000.ABN AMRO currently provides consulting services for assets totaling $800 million, and its clients are mostly owners of small and medium enterprises. “We are very strong as a diamond financing bank, and diamond [industry] clients are automatically our target clientele and constitute a substantial portion of our business,” says Banerjee.Vallabh Bhansali, director of Enam Financial Consultants, a financial services firm based in Mumbai, believes the concept of wealth management is often misunderstood in an emerging market like India. “Income and wealth are different as far as our understanding is concerned,” he says. “Many banks offer transaction-driven services. That is not wealth management. We tell our clients to give us all their worries, and think wealth. Serious wealth management requires that the wealthy should really think wealth seriously.” Enam accepts clients with a minimum of $1 million in assets and employs three wealth managers to service them. Dokania of DSP Merrill Lynch is working out hybrid models to attract the right clients. “Create a product proposition that is all pervasive – equity, fixed income, debt, advisory – and you have a relationship that is not just transactional,” he says. His firm’s threshold for taking on asset management clients is $500,000 in financial assets, excluding the value of home equity or jewelry. He says his firm’s clients average a portfolio size of $1.5 million.As the wealth management market evolves, wealth managers are preparing to offer more and more sophisticated financial products. “Real estate venture funds are the new fad in the market, given the superlative returns real estate investments have been offering in the last few years,” Banerjee says. “Soon we can expect the introduction of REITs (real estate investment trusts) and real estate mutual funds.” Puri feels alternative markets for assets like art will become much bigger, especially with the presence of a dedicated fund, both in India and overseas.Regulatory ConstraintsWhile the wealth management market is expanding, regulatory constraints prevent banks from offering a wide range of services. “There is a host of products which a bank can’t sell and provide to its clients,” Banerjee says. “Until recently, banks were not allowed to sell real estate venture funds. Similarly, banks are not allowed to run a portfolio management scheme for clients.” Banks can offer such services only by setting up separate non-banking finance companies, “licenses for which are also very hard to come by.”As a result, ABN AMRO offers its clients investments in debt, equity, mutual funds and insurance through the mutual fund route and a variant of portfolio management services, she says. It has also put in place third party arrangements to help its clients invest in newer asset classes such as real estate and art. ABN AMRO currently has about 700 client groups with assets totaling some $800 million. Banerjee hopes to increase that figure to between $2 billion and $3 billion in the next few years.Banerjee predicts that the regulatory establishment will eventually loosen up, with India moving towards full convertibility of the rupee on the capital account, which essentially will allow its unhindered flow to foreign markets. By 2009, “the regulatory regime in India will be more conducive for foreign banks to do business in the country.”Dokania and Puri point to recent moves in that direction by India’s central bank, the Reserve Bank of India. Indians can now remit up to $50,000 overseas in a single year, and that cap will be raised to $200,000 by 2009. Banerjee notes that these measures will open more opportunities for banks like hers to offer clients international investment products. Related Itemslast_img read more

FIFA World Cup 2018: Egypt Go Home Empty Handed As Saudi Arabia Get A…

first_imgAdvertisement(photo credits: Nigeria News)A low drive to the bottom corner from Salem Al Dawsari in the dying moments of the game proved to be the decisive goal as Saudi Arabia went on to beat Egypt 2-1 registering their first win of the tournament.Both the teams went into the match having already been knocked out of the tournament. They were each looking for a win to get 3 points and salvage some pride.Mohammed Salah opened the scoring for the Egyptians in the 22nd minute lobbing the ball over the goalkeeper’s head. Minutes later Salah had another golden opportunity to increase the lead but put the ball wide.El Hadary then preserved Egypt’s lead, the 45-year-old saving a penalty awarded for handball in the 41st minute. But Saudi Arabia did equalise from the spot shortly afterwards, Salman Al Faraj sending El Hadary the wrong way in added time at the end of the first half.Salem Al Dawsari then scored in the 5th minute of the added time in the 2nd half to snatch the win for Saudi Arabia.Thus Group A sees Uruguay top the charts and Russia finish 2nd. Saudi Arabia get a consolation win and finish 3rd in the group. Egypt couldn’t open their account this world cup and will return home having had a disappointing tournament.Here are the highlights of the match:Also Read:FIFA World Cup 2018: Stats of the Day – Day 11 Advertisementlast_img read more

Related Awesome Autumn 10 fabulous fall foliage s

first_img RelatedAwesome Autumn: 10 fabulous fall foliage spots for leaf peepingAwesome Autumn: 10 fabulous fall foliage spots for leaf peeping5 things to ‘fall’ in love with in Canada this autumn5 things to ‘fall’ in love with in Canada this autumnAutumn Deals: Insta-enviable but won’t break your budgetIn the northern hemisphere, leaves are on the turn, busy painting landscapes in fiery shades of red and gold. This annual phenomenon makes autumn high season and you’ll likely be competing with locals too, especially on the weekends. Book now to get the best deals.  Meanwhile, in the southern hemisphere, our… Dear Skyscanner,I love to go and see the autumn leaves at this time of year. Where are the best places for ‘leaf peeping’ and enjoying the autumn colours?Monica, PenzanceDear Monica,Autumn is my favourite time of year to travel – and not just because of the wonderful foliage displays around the world – it’s when some of the hot spots of Europe and North America have cooled to a more manageable climate.It is also the season of harvest, and therefore food festivals – a great time to be exploring the world. If it’s the leaves you are going for, first and foremost, then North America is where you should head – more specifically New England and eastern Canada. The further south you go, the later the season, so go early to mid-October for the north and early November further south. Vermont puts on a real show at this time of year, thanks to its mixed foliage of maple, alder, ash, red oak, birch and beech trees. You’ll be able to enjoy country fairs, harvest-time markets, farmers markets and even foliage festivals. There are also countless activities you can tackle in the great outdoors like hiking, canoeing, and fishing or maybe just peeping and snapping photos is enough. If you’re a real leaf geek, take a look at foliage-vermont.com, which is dedicated to tracking the colour change of Vermont’s foliage in an attempt to find that elusive peak when the colour is at its most spectacular. Keep an eye out here for timings and photos of some spectacular previous displays. If you head to New London in Connecticut, you can enjoy the foliage displays from the comfort of the Essex Steam Train, 1926 coal-fired steam locomotive. You will get a running commentary on the villages, farmland and mountain scenery you pass through and get great views of the Connecticut River, as well as dramatic crossings over the water. In Canada, the most famous spots are Ontario, Quebec, Nova Scotia and New Brunswick. All have websites, many with webcams, which help you to plan your trip around the most spectacular displays. The Laurentian Mountains in Quebec are some of the most spectacular in Canada, with their sugar maples and yellow birches. It all centres on Mont Tremblant, where there is an annual festival, Symphonie des Couleurs, from early September to the end of October. You can take organised hiking trails out of Tremblant, and there are open-air concerts and events for foodies. If that’s a bit too far to go and you’re looking for autumnal spectacles in the UK, try Sherwood Forest in Nottinghamshire, famous for its great old oaks, and of course its legendary hero, Robin Hood. Make sure you pay a visit to Major Oak, the grand old master of the forest at well over 800 years old, and a half-hour walk from the Visitor Centre.There’s also the Westonbirt Arboretum in Gloucestershire, which has its own maple shows from early October for a month or so. They are not as striking as the displays over the Atlantic, but magical none-the-less.Answer by Ginny Light – TimesOnline travel editorGot a travel question? Email sam@skyscanner.net and we’ll get our panel of travel experts to answer your question.Read more: Ask SkyscannerReturnOne wayMulti-cityFromAdd nearby airports ToAdd nearby airportsDepart14/08/2019Return21/08/2019Cabin Class & Travellers1 adult, EconomyDirect flights onlySearch flights Maplast_img read more