Reliance Capital to grow overseas

The Indian firm is opening asset management and related businesses in Singapore, Malaysia and Dubai.

Reliance Capital in Mumbai is engaged in several initiatives to create a global platform of asset management, life insurance, brokerage and wealth management, initially catering to non-resident Indians but ultimately to attract non-Indian clients.

The firm has promoted its CEO, Vikrant Gugani, to a new role as CEO for international business, effective the beginning of 2009. "My job is to take Reliance Capital global," he says.

Former deputy CEO Sandeep Sikka has been elevated to CEO of the Indian business.

Reliance is the largest mutual-funds player in India, with over $20 billion of assets under management (including pension mandates and discretionary portfolio management) and a 17% market share. Although there remain plenty of growth opportunities in areas such as funds and insurance in India, where penetration levels for the industry remain low, the firm decided it has the brand and enough capital to extend its reach overseas.

It is now restructuring a rep office in Singapore, which to date has served to manage a $150 million India equity long/short fund. Reliance plans to set up an institutional investment management business there and is in the process of obtaining the necessary licenses. Reliance has hired a native Singaporean to serve as CEO of the office, but the person has yet to join so Gugani declined to reveal a name.

The firm is actively looking for people to run new offices in Kuala Lumpur and Dubai. It has just received a license in Malaysia to run Islamic asset management. It has also just obtained a wealth-management license in the Dubai International Financial Centre. Reliance is further looking to set up life insurance operations in a number of markets in the Middle East and Southeast Asia. Lastly, it now has a license to do asset management in Britain.

The Singapore office's local business is institutional, but Gugani sees the office as a hub to coordinate retail efforts in Malaysia and Indonesia for asset management and insurance, and to liaise with the Dubai office with regard to product and cross-selling opportunities. "We intend to cover asset management, life insurance and distribution across the arc from the Gulf to Southeast Asia," he says.

His challenge is finding local people with the right experience to drive these various initiatives. Reliance is a big player at home but a small one abroad. Gugani recalls his decade's worth of experience at Ciitgroup: an organisation with the size, depth and experience to export its processes to various markets. "We can't be like that," he says."I want to find entrepreneurs who can run a business on their own, who can work within the local culture and execute a business plan suited to local conditions."

For now the firm's international ambitions will involve building teams and getting regulatory approvals. Although the plan has been in the works for some time, Gugnani accelerated his move to his new role once it became clear that global markets were headed for a funk. The firm can use the downturn to set up an international platform at a time when it hopes other providers are putting plans on hold, with the hope of beginning to market products by 2010.

¬ Haymarket Media Limited. All rights reserved.