Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
Rashmi Mehrotra has been appointed business leader for investment consulting in India along with her role as head of retail services for Asia-Pacific. Technically based in Sydney, she will mainly reside in Mumbai to ensure the new ventureÆs success.
She has been with Mercer for four years, on top of working at Van Eck Global in Australia, giving her 14 years of experience in fund manager research and retail services in Asia-Pacific. She had joined Mercer when it first set up its retail business in Australia, where it advises private banks and multi-management firms. She reports to Tony Cole, head of the firmÆs Hong Kong-based investment consulting business in Asia-Pacific.
Mercer has recently expanded this business to Hong Kong and Singapore. It is looking for a head of its retail business for Singapore and, with MehrotraÆs move to Mumbai, now Sydney as well. Late last year it also entered the China market with a retail mandate for multi-management products from Ping An Insurance.
In India it will offer services to domestic and international private banks and premium wealth-management firms operating onshore. For example, Citi is a client in Singapore, and the India office helps Mercer service it more from a regional perspective. But it is also going after domestic players that have grown rapidly in line with the growth of high-net-worth individuals.
MercerÆs retail business is not aimed at the mega-rich or family offices, however, which it would include in its normal institutional business.
This service offers clients, via their wealth managers, portfolio modelling based on MercerÆs macro asset-allocation views as well as its knowledge about fund managers. The business is similar to what it already does for institutional investors, but includes some features particular to the retail market: for example, an emphasis on integrating behavioural financial models, selecting products with things like tax in mind, and offering research on retail-oriented structured products.
Mercer also intends to combine its advice with support for private banks including IT and training. It has hired two research analysts in Mumbai and is looking to hire more with experience in alternative asset classes.
In addition, the India business will research India-based or focused fund managers so Mercer can include these in its global research; and it will research Indian asset classes in order to provide suggestions to institutional clients about asset allocation. In other words, Mehrotra explains, Mercer can suggest investors should have exposure to, say, Indian real estate, infrastructure or listed equities. It can tailor such an exposure for each client and then shortlist fund managers to fit the bill.
Such clients include pension funds, sovereign wealth funds, insurers, endowments and, more recently, retail intermediaries such as private banks and multi-manager funds. It says its clients have $3.5 trillion of assets under management and come from 35 countries.
Regulators keep their eyes open on tightening insurance industry by introducing more detailed risk management requirements, which could bring pressure on smaller players.
China and India are more obvious choices for AustralianSuper to consider in Asia Pacific, but the super fund currently lacks the expertise and prefers to stick to the US and Europe.
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