Companies on a hiring spree, new money fuels wealth management boom in India

Synopsis

A combination of factors, including an increase in liquidity events, owing to an upbeat private equity and venture capital investment trend, an upturn in mergers and acquisitions (M&As), and vesting of ESOP pools by a larger number of companies, has fuelled demand for money managers, said the executives.

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Demand for private bankers and wealth managers has surged in India with a burgeoning pool of ultra-high-net-worthindividuals (HNIs) and the emergence of new millionaires. Leading wealth management companies are on a hiring spree, ramping up their teams especially at the senior leadership levels, said industry executives.

A combination of factors, including an increase in liquidity events, owing to an upbeat private equity and venture capital investment trend, an upturn in mergers and acquisitions (M&As), and vesting of ESOP pools by a larger number of companies, has fuelled demand for money managers, said the executives.

Growing wealth in tier-2 and tier-3 cities, such as Chandigarh, Kochi, Lucknow, Jaipur and Nagpur, has also contributed to the demand. Motilal Oswal Private Wealth, which caters to more than 4,700 families and manages close to Rs 38,400 crore of wealth and distribution assets, is strengthening its leadership team across functions such as ultra HNI/family office, offshore business and investor advisory.

Its recent senior level hires include Apurva Kothari, who leads the ultra HNI/family office and offshore business; Srinivas Mendu, who heads its business in southern India; and Narender Reddy, who leads investment advisory. In the next six months, the company aims to increase its professional wealth managers to 200 from 150 at present, as it expands its footprint across the country and offshore locations, said Ashish Shanker, CEO, Motilal Oswal Private Wealth.

“The number of HNIs is growing exponentially,” according to Shanker.


Migration to Financial Assets


“This is happening because of a rise in liquidity events, startups and even larger companies empowering senior professionals with stock options, as well as migration from physical assets to financial assets. All this is contributing to the demand for wealth management,” said Shanker.

Umang Papneja moved from IIFL Wealth to Julius Baer as CEO, while Anupama Sharma from Kotak Wealth Management joined IIFL Wealth as executive director. Aman Rajoria moved from Standard Chartered Bank to Aditya Birla Finance as head of wealth management. Anuj Kapoor, a former UBS banker, joined as CEO of JM Financial Private Wealth & Venture Capital Funds Platform. Anshuman Maheshwary, chief operating officer of IIFL Wealth & Asset Management, said increasing monetisation events in India are leading to new wealth being created and as a result there is growing demand for wealth management professionals not just from HNIs in metro cities but also from tier-2 and tier-3 towns and cities.

“We have aggressive plans to hire quality bankers to advise clients,” said Maheshwary. An increasing share of individual wealth created due to underlying economic growth will come under professional management, he said. There are about 4,000 established wealth managers in India at present, according to estimates by Native, a leading executive search firm that specialises in the financial services sector. More than 1,500 of them are managing assets of Rs 100 crore and above, while about 400 are managing more than Rs 1,000 crore.

“Apart from the ultra-HNIs, the ballooning of new wealth in the last three years through sky-rocketing compensation and ESOPs for the top brass, especially in the technology and startup sectors, has led to the creation of a new pool of HNIs who need advisors to manage their wealth,” said Shujat Ali, director, private banking practice at Native.

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