The numbers speak for themselves. India is expected to grow by around 6% in 2023 and is on track to become a $5-trillion economy by 2027-28, the third largest in the world. Deeply entrepreneurial, nearly three individuals each day join the ultra-high-net-worth (UHNW) club with a net worth of more than $30 million as start-ups go to market. India is on a steep growth trajectory that is set to alter the local wealth management market as needs and demands change.
Julius Baer, with its long-term presence and multi-award-winning franchise, is the largest foreign private bank in India. As the market proceeds to grow and evolve further, the Bank is committed to continue to offer the best services to its clients bringing them the best from both of its worlds: a global view as well as a deep local knowledge of India.
“To meet this changing demand, we have embarked on a five-year transformation journey”, explains Rahul Malhotra, Head Private Banking Global India & Developed Markets. “India is one of Julius Baer’s core growth markets,” adds Malhotra, who has been working in private banking serving Indian clients for over 30 years.
Here to stay: long-term commitment and presence
The new wealth being created in India will be spread across the country, with almost 100 towns and cities with UHNW representation. “Currently, 50% of India’s resident wealth is concentrated in five cities. A further 10-15% in the next five and another 15-20% in the next 20 cities. The newly created wealth is expected to grow particularly in the small centers rebalancing the overall distribution”, explains Umang Papneja chief executive officer for Julius Baer’s activities in India.
“To support the rapid wealth creation in India, our ambition is to double the number of relationship managers and clients, triple our assets and extend our reach to new cities. Our strategy is to have an efficient hub and spoke model – a strong network of Relationship Managers spread across the country with a deep understanding of the local culture and environment with subject experts in the hub,” Malhotra says.
As the largest foreign private bank in India, Julius Baer currently employs more than 200 people. The five-year business transformation will invest across the board in people, products, operations, technology, branding, and infrastructure. Currently present in seven cities in India – Julius Baer has plans to spread to more than 10 cities. In July 2023, the Bank moved to a new office in New Delhi. As part of the firm’s strategic hub and spoke model, this office functions as a satellite location, continuing to play a crucial role in serving clients in the Delhi region and various locations across North India.
Changing wealth requirements
Traditionally India’s private banking clients have been largely interested in mutual fund investments. More recently, wealthier clients are looking more to alternative asset classes, including AIF’s (Alternative Investment Funds). In just 10 years, according to the Securities and Exchange Board of India, this market has already raised 80 billion USD in AUM in India. Julius Baer has applied for an AIF license and expects to launch an equity AIF fund by end of 2023. Many clients are also taking an active interest in expanding their investment knowledge and learning more about product offerings and asset allocations.
Indian investors have also become more interested in wealth planning – curating and structuring their finances with a clear view towards the future. This ensures that their capital is held and managed in a manner that is efficient and as transferrable as possible from one generation to another. Local media has regularly covered the notable increase in the number of global family offices for India’s elite families.
Another area of transformation is with Non-Resident-Indians (NRI). India has the world’s largest diaspora. They are spread across the world and amount to some 30 million people – the size of a whole country. Due to the size of this group Julius Baer has teams servicing NRIs in Singapore, Hong Kong, Switzerland, and Dubai.
This long-term mentality and commitment to the region is also reflected in Julius Baer’s social responsibility and sponsorship activities on the continent. In line with the Bank’s belief that how we invest today is how we will live tomorrow Julius Baer India, has taken a holistic approach to these choices and remains committed to the region for the long term.