In India, investment or advisory firms have tended to describe themselves as multi-family offices (MFOs) when looking to create and sell investment products to the rich, rather than because they offer a wide range of services needed by such clients. But awareness is growing – as it is elsewhere in Asia – that a different approach may be necessary.
So says Munish Randev, newly appointed chief investment officer for the recently launched MFO business of Waterfield Advisors in Mumbai.
He joined the financial advisory firm this month from Avendus Wealth alongside another new hire, Amit Shah, director of corporate advisory services. Shah was most recently with Avista Houlihan Lokey, a tie-up between Singapore-based Avista Advisory and US investment bank Houlihan Lokey.
Mumbai-based Avendus is not thought to have replaced Randev, while AsianInvestor could not ascertain by press time whether Shah's old post had been filled.
The duo report to Waterfield chief executive Soumya Rajan, who was India head of private banking at Standard Chartered before launching the advisory firm in 2011.
The MFO team is now four-strong, and there are plans to bring in five more staff in the coming months – three relationship managers and two on the investment side.
The platform has backing from the Patni family office, one of the country’s biggest SFOs, formed after the sale of Patni Computer Systems in 2011. Brothers Amit and Arihant Patni acquired a stake in Waterfield in March with a view to helping build a corporate advisory and MFO business.
The concept of rich families having a ‘go-to’ person for their needs – whether insurance, luxury goods or legal services – has been around for hundreds of years, said Randev, but the creation of formal FOs is becoming more commonplace.
“A lot of people are setting up family offices [in India],” he told AsianInvestor. “How successful they are will boil down to the financial backing they have and what their gestation period is. Very few setting up are funded by large families, so how many will remain, time will tell.”
There are some, such as Gregoire Imfeld of Pictet, who have suggested that the MFO model that is widespread in Europe is unlikely to prove successful in Asia. But others, notably David Reymond of Julius Baer, argue the approach is well suited to the region.
Asked what kind of investment expertise Indian families are seeking, Randev replied: “Traditional equity and fixed income continue to form the bedrock of portfolios. But families are now looking more at alternatives, such as pre-IPO placement, the unlisted space; that’s where they’re showing more interest.
“Rather than go into a bond fund or hedge fund, they want to do more touch-and-feel-type investments, such as directly into real estate or a business rather than a venture capital fund,” added Randev. Hence a differentiator for FOs would be the access they can provide to individual deals, he noted.
India's wealthy are also looking more at offshore assets, said Randev, citing as an example property redevelopment projects in London. In turn, many families outside India want to invest in the country, especially following new foreign portfolio investor guidelines, he added. Narendra Modi's election as prime minister has also fuelled optimism about the domestic economy and capital markets.
Randev spent four years as the head for investment advisory at Avendus, before which he had worked at US fund house Fidelity and Dutch bank ABN Amro. Shah's core experience lies in investment banking, working on domestic and cross-border debt and equity raising deals. He was most recently senior director for investment banking with Avista Houlihan Lokey.