India’s largest fund manager targets European wealthy
India’s stock market may be down by more than a third this year but this has not stopped the country’s largest fund manager, Reliance Asset Management, from seeking business from Europe’s wealth managers for the first time.
The company has won approval from the UK’s Financial Services Authority to open an office in London to attract assets from wealthy and institutional investors in the UK and Switzerland.
It has launched an offshore fund, Emergent India, targeted at international investors. Its manager, Sunil Singhania, said: “The timing for marketing may not be right, but from an investment perspective it is just right. From these levels there is a great opportunity for investors, although there will also be some short-term dips.”
Reliance is owned by billionaire Anil Dhirubhai Ambani. It manages $23bn (€14.5bn) in local Indian mutual funds, allowing retail clients to invest as little as $2 a month in its products. The minimum investment in the Emergent India fund is $100,000.
Singhania started raising his cash weighting in October in expectation of a market correction. He had 25% in cash at the start of June, but has just started to put the money to work.
He likes capital goods and construction companies, where he has been underweight of late. With valuations in these sectors down by more than half, its stocks are starting to look attractive again.
He also likes financial services companies on the grounds that India is under-banked, although he expects the next six months to be tough for the local economy. India is in danger of becoming a hostage to inflation, which has hit 11.4%, due to the rising cost of fuel and food.
An Indian election, due within a year, could also weigh on local stocks: “The market might react negatively to the political rhetoric.”
Domestic uncertainty has helped persuade Reliance to look overseas. It launched a $1.4bn natural resources fund in March that is allowed to have 35% of its portfolio invested outside India. A representative office in Dubai targets non-resident Indians in the Middle East.
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