I N D I A N W E A LT H M A N A G E M E N T S P E C I A L
Edelweiss's
Kapoor: "Wealth
management in
India is going
mainstream"
E
delweiss Wealth Management, India’s third-largest wealth
manager by AUM, not only expects to grow revenues and assets
by some 50% this year, but to maintain this aggressive rate for the
next decade, according to its head of global wealth management, Anshu
Kapoor, who said the firm continues to benefit from “a huge flow [of
assets] directed into financial assets” and a significant shift in the scale
and need for wealth management services in a country where around
150,000 families hold approximately US$2 trillion in wealth.
Edelweiss has also shrugged off its aborted acquisition of Religare
Enterprises’ securities business after the acquiree failed to receive
regulatory clearance. That deal would have added 1 million clients to its
books. Kapoor said that the opportunities “keep coming”.
“Had we got it, it would have been great, but now we are also looking
to buy out capabilities,” he said. “I’m very positively surprised — we
are talking to a lot of fintechs with great products but without scalable
business models. This is all very early stage. Nothing has been finalised.”
In fact, Edelweiss is at the forefront of a decisive shift in the centre
of gravity between product pushers and solutions providers. From
Kapoor’s vantage point, the wealth management industry in India is
“going mainstream”.
“What used to be the prerogative of the distribution arm of a bank or
financial services firm is now the domain of unique and independent
wealth management firms, and this trend will only continue,” he said,
adding that, now more than ever, the relative success of players in today’s
environment is a function of value proposition, client experience,
technology, and product platform.
Anshu Kapoor, head of global wealth management, Edelweiss
“Only about 20% of this wealth is with the organised players; and if I were
to break it up, around 20-30% sits in real estate and 30% in equity in listed
and unlisted firms. So the penetration has not caught up,” he said.
Indeed, the regulator has also played a decisive role in developing the
industry, creating regulatory structures for new classes of products
germane to India’s ultra high net worth community, and to the benefit
of Edelweiss.
“The alternative investments class has been helped along by the
regulator and changes to the insolvency bankruptcy code,” explained
Kapoor, pointing out that Edelweiss was the first local player to launch
a distressed asset fund for its clients and one of the few players that offer
infrastructure-linked assets.
Meanwhile, Edelweiss is pushing ahead with its digitisation programme.
Kapoor believes the firm’s investments in tech are beginning to pay
off, not only in basic risk profiling but in deploying actionable advice
that is customised to an investor’s profile, where 60-70% of clients are
entrepreneurs with specific needs, whether around raising capital or
making acquisitions.
But Kapoor also expects disruption in India to come from tech firms
themselves, which can commoditise standard services including asset
allocation.
“So why would a customer need a firm like Edelweiss?” asked Kapoor.
“They come to us for knowledge and unique wealth management
opportunities that such tech players cannot provide.”
23