The third largest money manager for the rich, Merrill Lynch & Co., Inc., hopes to triple its assets managed in India to about $20 billion (Rs82,200 crore) by 2009 as it seeks to earn more fees from a growing number of wealthy people in the country.
“We plan to open an asset management office in New Delhi and double the
number of financial advisers in the country to 550,” Rahul Malhotra—who heads the New York-based wealth management company’s private client group in India—said at a conference in New Delhi on Thursday.
Lion’s share: A file picture of DSP Financial Consultants’ founder, Hemendra Kothari. Merrill Lynch paid him $500 million to increase its stake in their joint venture from 40% to 90% in December 2005.
Merrill is vying with UBS AG, the world’s largest manager of private wealth, Citigroup Inc. and other private banks for more of the assets created as India’s $854 billion economy expanded an average 8.6% annually during the past four years—the fastest pace in six decades.
Overall, the number of millionaires in Asia rose by 8.6%, according to a report by Capgemini SA—a Paris-based consulting and technological services company—and Merrill Lynch in June.
India, China, Brazil and Russia are the leaders in wealth creation worldwide, Nick Tucker, market leader for Merrill Lynch’s UK private client division, said when the report was released.
The New York-based investment bank’s report predicts the world’s wealthy will shift more of their assets into “alternative investments” such as hedge funds and derivatives, by 2008.
Merrill Lynch had said in March it plans to open as many as 20 offices in India in three years as it expands into a dozen cities, including Pune, Jaipur, Chandigarh, Ahmedabad and Ludhiana.
Standard Chartered Plc., which earns most of its profit in Asia, started its private banking business in India on 15 June with 200 clients who had assets of more than $1 million each.
The bank expects that number to increase to 1,000 by the end of next year, said Murali Natrajan, regional head for consumer banking. Standard Chartered also plans to double the number of relationship managers in India to 50 from 25, Natrajan added.
Merrill Lynch has been expanding private banking in the country after increasing its stake in an Indian investment, banking and wealth management venture with Mumbai-based DSP Financial Consultants Ltd to 90%, from 40% in December 2005. Merrill Lynch paid DSP founder Hemendra Kothari $500 million in the transaction.
There are about 22 million Indians living outside their country owning more than $350 billion in assets, of which as much as $8 billion can be invested annually, Malhotra had said in March.
The largest growth in the number of millionaires, with net assets of at least $1 million, was in Singapore and India, advancing by 21.2% and 20.5%, respectively, Merrill’s June report stated.