Raymond James Financial Inc., one of the largest financial services firms in the US, is withdrawing from the Indian market at a time when other companies in the space are entering it. The company’s representatives announced on Thursday that it would sell its 50% stake in brokerage ASK Raymond James Securities India Pvt. Ltd to its Indian partner.
“Raymond James hasn’t been actively managing it (the India venture) for some time,” said Paul Matecki, general counsel and director of compliance at Raymond James.
“So we agreed to let them (the Indian partners) buy our interest out and run it all on their own.” Raymond James has no immediate plans to re-enter India.
ASK Raymond James was a joint venture (JV) between ASK Investment and Financial Consultants Ltd, an institutional brokerage and investment bank, Raymond James Financial Inc. and the firm’s chief executive officer Bharat Shah that started operations in 1994. Matecki said that the India venture was the only JV that Raymond James had anywhere in the world.
Asit Koticha, managing director of ASK Raymond James, added that the local partners had built up the business on their own, and now they were planning to diversify into catering to the investment needs of high net worth individuals.
He declined to put a number to the amount the partners had paid Raymond James for its stake.
After the buyout is complete, the business will be run by three subsidiaries: ASK Investment Managers Private Ltd led by Shah, ASK Securities India Pvt. Ltd that will be headed by Mukarram Bhagat and and a new financial planning business, ASK Wealth Advisors Private Ltd, to be led by Rajesh Saluja. Shah will have a 25% stake in ASK Investment Managers and Bhagat and Saluja’s stakes have not yet been decided. All companies will be part of a holding company called ASK Investment Holdings Private Ltd, which will own the remaining stake in the subsidiaries.
ASK also plans to look beyond equity products in its $500 million (Rs2,200 crore) portfolio management business, and Koticha said private equity was a natural extension, and real estate, a possibility.
He added that ASK had benefited from the Raymond James name and systems, and would continue to consult the company on some transactions. Thomas Hamilton of Raymond James, who recently retired, will remain on the board of ASK.