Indian strategic focus turns toward integration
A number of investment firms are looking to tap into the opportunities on offer in the Indian wealth management market, writes Graham Harvey, but they face stiff competition from domestic players
India, both onshore and in the non-resident Indian (NRI) community, is big business for the wealth management sector. Onshore, market sizing estimates swing north of 75,000 high net worth indididuals (HNWs) and $500bn in potential assets. Offshore the data is unclear, but with Lakshmi Mittal, the British-based steel magnate, sitting at the top of the Indian NRI-tree (and making the top ten in the Forbes global index) with an estimated wealth of over $19bn, the attraction is high. Indeed, India has been a strategic growth focus for several firms in recent months. Many are stepping up their efforts to tap into this lucrative market by embarking on a hiring spree and developing new wealth propositions to attract new clients. The key strategic issue at present is how to combine onshore and offshore capabilities for wealthy Indians across geographies. Global initiatives Standard Chartered, with its traditional focus on Asia-Pacific and strong retail presence in India, has launched a “Global Indian” initiative on exactly these lines. The firm has also ramped up its capabilities in the UK (focusing on NRIs in the Gulf Cooperation Council) and in Singapore, tapping into the wider NRI communities and leveraging old Amex Private Bank relationships. SG Private Bank has also established an onshore presence in India. Recently the bank launched a new programme to link the Indian and NRI teams via investment deals across desks. The proposition will be run by closer collaboration between the Indian offices and branches in Hong Kong, Singapore, Dubai and the UK. Growing capabilities Other foreign players realising and building up NRI capabilities include Deutsche Bank, which aims to double assets under advisory for NRI clients over the next two to three years, and Barclays Wealth, which recently launched its onshore presence in India and poached nine senior bankers from UBS. Offshore, the other major force is Citi Private Bank, which has resolutely stuck to its $10m plus entry criteria. However, the local Indian players, such as ICICI and HDFC are not likely to give up this lucrative market without a fight. Domestic banks have been beefing up their wealth proposition, forming both domestic and international alliances. Several Indian banks have also established local offices in key markets for the NRI community. ICICI in particular has been following this path – with offices in the US and UK in particular. Also, Religare Macquarie, a joint venture between local brokerage house Religare and Australia’s Macquarie Group, was rumoured to be eyeing ING Private Bank to give it greater NRI capabilities. We expect this will become a more common play for growth and wealth-focused Indian businesses. Graham Harvey is a director at wealth management think-tank, Scorpio Partnership
