US-based Invesco scouts for India deals

US-based Invesco scouts for India deals

Hyderabad: US-based money manager Invesco Ltd, which oversees assets in excess of $615 billion (Rs27.7 trillion) globally for retail and institutional clients, is scouting for potential acquisitions in India after excessive valuations thwarted previous attempts to enter the local fund management business, chief executive Martin L. Flanagan said.

“As a global investment management fund, we cannot ignore India—just from the sheer size, the growth, the investment opportunities," Flanagan said on Wednesday during a visit to Hyderabad, where he opened a support facility that will deliver financial and information technology services to the firm’s global operations.

For each of the past five years, the Atlanta-headquartered company has sized up opportunities to enter India including through acquisitions, but a purchase proved elusive because either the valuations were too high or the “investment process was something we didn’t think would fit us", he said.

“But we won’t stop looking," Flanagan added. “We will continue to be opportunistic to determine a time when we think it might make sense to have a local asset management business here in India."

Goldman Sachs (India) Asset Management Pvt. Ltd bought Benchmark Asset Management Co. Pvt. Ltd this month to enter India’s Rs6.75 trillion fund management industry. It paid Rs130 crore in one of the highest-valued transactions in the industry after the global financial crisis.

Goldman paid around 4.43% of the local fund’s assets under management (AUM) at the end of December. Last year, T. Rowe Price Global Investment Services Ltd purchased a stake in UTI Asset Management Co. Ltd, pricing it at 3.25% of AUM.

Any asset manager entering the fund management industry in India at this juncture would have to be prepared to stay the course, said Dhirendra Kumar, chief executive of mutual fund tracking firm Value Research.

“The industry is in a state of flux," he said. “There were quite a few grey areas in the fund management space that are now being clearly articulated by regulatory change and convention. Any international player has to be very long-haul-driven to become a meaningful player."

Invesco’s 100,000 sq. ft Hyderabad enterprise centre opened on Wednesday is its third largest facility by headcount; with 600 employees, it makes up 11% of Invesco’s global workforce, said Flanagan.