KARVY GROUP STARTS CORPORATE RESTRUCTURING

Appoints Mr. Amitabh Chaturvedi as Group CEO – Financial Services

Mumbai, December 31, 2019: The Karvy Group announced today that it is in the process of restructuring its overall business into two verticals - Financial Services and Non- Financial Services. As a part of this process, the company has also initiated a major management reshuffle. The move is expected to improve the overall governance and functioning across the enterprise.

Mr. C Parthasarathy, Chairman, Karvy Group, announced the appointment of the industry veteran Mr. Amitabh Chaturvedi as Group CEO - Financial services with a mandate to completely overhaul the governance processes, ensure best practices and to bring in greater fiduciary discipline to these businesses. He has previously been associated with leading organizations such as Dhanalakshmi Bank, Reliance AMC, ICICI and the Essel Group and has over 30 years of experience in the financial services space.

Speaking on this development, Mr. C Parthasarathy, Chairman, Karvy Group, said, “We welcome and are extremely pleased to announce the appointment of Mr. Amitabh Chaturvedi as Group CEO - Financial Services. We look forward to scaling new heights under his leadership. His extensive experience and incisive vision of the financial services sector will definitely enhance our brand value.”

Mr. Amitabh Chaturvedi, said, “It gives me immense pleasure to be a part of Karvy, a financial services Group that has been a front runner in the sector for more than three decades. The leadership team will work on making the brand stronger and with fund raising we shall see it reaching new heights.”

The restructuring will see stock broking, wealth management, commodities trading and investment banking among others come under the ambit of Financial Services while Non-Financial services will comprise of data management services, data analytics, market research and allied businesses. Changes in senior management are also being initiated and an experienced team would assist Mr. Chaturvedi in implementing the Group's vision of having a strong presence in the financial services space.

About the Karvy Group:

The Karvy Group, established in 1982 and headquartered at Hyderabad, is present across the entire spectrum of financial services, such as stock broking, distribution of financial products (including equities, mutual funds, bonds, IPOs, and fixed deposits), wealth management, corporate finance, commodities broking, NBFC, data management services, investment banking, and depository participant, among others.

KARVY GROUP INITIATES CORPORATE RESTRUCTURING

Appoints Mr. Amitabh Chaturvedi as Group CEO – Financial Services

Mumbai, December 31, 2019: The Karvy Group announced today that it is in the process of restructuring its overall business into two verticals - Financial Services and Non- Financial Services. As a part of this process, the company has also initiated a major management reshuffle. The move is expected to improve the overall governance and functioning across the enterprise.

Mr. C Parthasarathy, Chairman, Karvy Group, announced the appointment of the industry veteran Mr. Amitabh Chaturvedi as Group CEO - Financial services with a mandate to completely overhaul the governance processes, ensure best practices and to bring in greater fiduciary discipline to these businesses. He has previously been associated with leading organizations such as Dhanalakshmi Bank, Reliance AMC, ICICI and the Essel Group and has over 30 years of experience in the financial services space.

Speaking on this development, Mr. C Parthasarathy, Chairman, Karvy Group, said, “We welcome and are extremely pleased to announce the appointment of Mr. Amitabh Chaturvedi as Group CEO - Financial Services. We look forward to scaling new heights under his leadership. His extensive experience and incisive vision of the financial services sector will definitely enhance our brand value.”

Mr. Amitabh Chaturvedi, said, “It gives me immense pleasure to be a part of Karvy, a financial services Group that has been a front runner in the sector for more than three decades. The leadership team will work on making the brand stronger and with fund raising we shall see it reaching new heights.”

The restructuring will see stock broking, wealth management, commodities trading and investment banking among others come under the ambit of Financial Services while Non-Financial services will comprise of data management services, data analytics, market research and allied businesses. Changes in senior management are also being initiated and an experienced team would assist Mr. Chaturvedi in implementing the Group's vision of having a strong presence in the financial services space.

About the Karvy Group:

The Karvy Group, established in 1982 and headquartered at Hyderabad, is present across the entire spectrum of financial services, such as stock broking, distribution of financial products (including equities, mutual funds, bonds, IPOs, and fixed deposits), wealth management, corporate finance, commodities broking, NBFC, data management services, investment banking, and depository participant, among others.

No of ultra rich falls to 2.56 L in 2018 from 2.63L: Report

High networth individuals have seen their wealth growth slowing down in 2018 to 9.62 percent from 13.45 percent a year ago, while their number has de- grown, says a report. High networht individuals are those with an investible surplus of over USD 1 million, and their number has crimped to 2.56 lakh in 2018 from 2.63 lakh in 2017, according to the data collated by Karvy Wealth Management.

According to the Karvy report, these 2.63 lakh ultr rich are worth Rs 430 lakh crore in 2018, up from Rs 392 lakh crore in 2017. The report comes even as more eye brows are being raised repeatedly over the rising inequality in the country, where the rich are getting richer and the poor, becoming poorer and at a faster clip.

As much as Rs 262 lakh crore of the wealth possessed by the high networth individuals are in the form of financial assets, while the rest are parked in physical assets, it said, adding the ratio has remained broadly the same at 60:40. Among financial assets, direct equity exposure is the largest at Rs 52 lakh crore, but growth in this segment plunged to 6.39 percent from a high 30.32 percent in 2017.

In line with broader trends, growth in fixed deposits and bonds rose 8.85 percent to Rs 45 lakh crore in 2018 from 4.86 percent growth in the previous year. Insurance is the third biggest component among financial assets at Rs 36 lakh crore, while bank deposits is worth Rs 34 lakh crore.

Much to the chagrin of the policymakers, gold is the most preferred asset class among physical assets for the rich as well, with nearly Rs 80 lakh crore of their wealth parked in the yellow metal. In line with market trends, growth in value of real estate holdings, second biggest asset class worth Rs 74 lakh crore, slipped to 7.13 percent from 10.35 percent in 2017.

The agency estimates individual wealth to grow at 13.19 percent every year till FY24 to touch Rs 798 lakh crore and a gradual rise in financial assets.

Visit - https://www.devdiscourse.com/article/business/710293-borealis-borouge-and-nova-chemicals-are-building-tomorrow-together-at-k-2019

Individual investor wealth up 10% at ₹430-lakh cr in FY19

Individual investor wealth across various investment avenues registered an impressive growth of 10 per cent to ₹430-lakh crore last fiscal compared to ₹392-lakh crore logged in the financial year ended March 2018.

According to 10th Karvy Private Wealth report released here on Wednesday, individual investors’ wealth in financial asset increased 11 per cent to ₹262-lakh crore (₹236-lakh crore) with direct investment in equity, fixed deposit and insurance topping the chart.

Investments in physical assets such as real estate and gold increased eight per cent to ₹167-lakh crore (₹156-lakh crore) in FY19. The proportionate of financial assets has moved up to 61 per cent from 57 per cent in the last five years.

Interestingly, investments in gold exchange traded fund (ETF) fell five per cent to ₹2,661 crore against ₹2,798 crore in FY18 largely due to emergence of sovereign gold bond which attracted an investment of ₹7,960 crore (₹6,960 crore).

Karvy Private Wealth estimates individual wealth in India to touch ₹799-lakh crore in the next five years with allocation to financial assets accounting for 66 per cent and that of physical assets touching 34 per cent.

Abhijit Bhave, Chief Executive Officer, Karvy Private Wealth, said notwithstanding the volatility, direct equity continues to hold the fort in terms of investment preference, reflecting investors belief equity markets.

“We believe India’s drive towards a $5-trillion economy will have a cascading positive effect on the individual wealth by 2024. We expect the HNI population to touch one million over the next five year,” he added.

Direct investment in equity is set to register the highest growth rate of 21 per cent to touch ₹136-lakh crore in five years from ₹52-lakh crore currently. Fixed deposit and bonds will grow at 12 per cent CAGR to hit ₹80-lakh crore (₹46-lakh crore), according to Karvy report.

 Visit - https://www.thehindubusinessline.com/markets/stock-markets/individual-investor-wealth-up-10-pc-at-430-lakh-crore/article29708647.ece

There will be no impact on Karvy Private Wealth

In the aftermath of the crisis at Karvy Stock Broking, many investors have been questioning the involvement of the other Karvy Group companies like Karvy Private Wealth.

Karvy Private Wealth is in the business of offering wealth management solutions to HNI, UHNI & family office clients. 

Market regulator SEBI recently banned Karvy Stock Broking from taking on new clients after it discovered a fraud of Rs.2,000 crore.

To understand what would be the impact on its investors Cafemutual spoke to Abhijit Bhave, CEO, Karvy Wealth, who said, “Unlike some other banks and wealth management firms, who primarily focus on investments in products manufactured by their own group companies, nearly all our clients have a large proportion of their investments in third party products. So there would not be too much of a material impact on the Karvy Private Wealth clients’ portfolios except those with stock portfolios and it is business as usual for us.”

Responding on how they are dealing with clients queries post SEBI’s order, he said, “I would not say our clients are exactly panicking at the moment but yes they are concerned with the media coverage about Karvy Stock broking. We have been regularly communicating with our clients and addressing all their queries.”

https://cafemutual.com/news/cafe-alt/17910-there-will-no-impact-on-karvy-private-wealth-after-karvy-stock-broking-episode   

Equity investments grow at 6.39% in FY19 despite volatile markets: Karvy report

The recent move to reduce corporate tax will give a generous fillip to our ailing economy and have a positive effect on the stock market, said Abhijit Bhave, CEO, Karvy Private Wealth

Direct equity investments continue to be the favourite of investors, growing 6.39 per cent in 2018/19, in spite of stock markets remaining lacklustre and volatile in the last one year. At Rs 52.10 lakh crore, investments in direct equity comprise one-fifth financial assets which saw investments by individuals, according to Karvy India Wealth Report 2019.

"This shows the belief of investors in the Indian equity markets, notwithstanding the volatility it has been through. We believe India's drive towards a $5 trillion economy will have a cascading positive effect on individual wealth," Abhijit Bhave, CEO, Karvy Private Wealth, said at the release of the company's India Wealth Report 2019. "The recent landmark move by the finance minister to reduce corporate tax will give a generous fillip to our ailing economy and have a positive effect on the stock market," he added.

Bank deposits, the second biggest in volume, saw growth of 8.85 per cent to Rs 45.82 lakh crore. The popularity of mutual funds has also picked up. This is evident from higher systematic investment plan (SIP) inflows and exponential increase in assets under management. Data shows a net inflow of Rs 92,693 crore in MFs through SIPs, an 38 per cent increase over FY18. Total individual wealth in MFs in India in 2018/19 stood at Rs 13.77 lakh crore, an increase of 18 percent over the previous year. Alongside, individual wealth in the country grew 9.62 per cent to Rs 430 lakh crore, continuing the acceleration over the last few years. A majority of this growth was achieved by 10.96 per cent rise in wealth creation by financial assets as compared to physical assets, which grew 7.59 per cent, the report said.

Visit - https://www.businesstoday.in/markets/stocks/karvy-india-wealth-report-2019-equity-investments-grow-at-6-percent-in-fy19-despite-volatility/story/385179.html

‘There will be no impact on Karvy Private Wealth after Karvy Stock Broking episode’

Abhijit Bhave, CEO, Karvy Private Wealth said that while the wealth management company is a division of Karvy Stock Broking, it is not directly impacted by the current episode.

In the aftermath of the crisis at Karvy Stock Broking, many investors have been questioning the involvement of the other Karvy Group companies like Karvy Private Wealth.

Karvy Private Wealth is in the business of offering wealth management solutions to HNI, UHNI & family office clients. 

Market regulator SEBI recently banned Karvy Stock Broking from taking on new clients after it discovered a fraud of Rs.2,000 crore.

To understand what would be the impact on its investors Cafemutual spoke to Abhijit Bhave, CEO, Karvy Wealth, who said, “Unlike some other banks and wealth management firms, who primarily focus on investments in products manufactured by their own group companies, nearly all our clients have a large proportion of their investments in third party products. So there would not be too much of a material impact on the Karvy Private Wealth clients’ portfolios except those with stock portfolios and it is business as usual for us.”

Responding on how they are dealing with clients queries post SEBI’s order, he said, “I would not say our clients are exactly panicking at the moment but yes they are concerned with the media coverage about Karvy Stock broking. We have been regularly communicating with our clients and addressing all their queries.”

Visit - https://cafemutual.com/news/cafe-alt/17910-there-will-no-impact-on-karvy-private-wealth-after-karvy-stock-broking-episode

$5-trillion economy to double individual wealth to Rs 800 trillion

Wealth manager Karvy Private Wealth in its tenth annual India Wealth report said the individual wealth is likely to grow at a CAGR of 13.2 per cent to Rs 799 trillion as India becomes a $5-trillion economy. The report estimates this will happen around FY24.

Individual wealth grew at 9.6 per cent to reach Rs 430 trillion over the last year, helped by growth in the financial assets. Financial assets grew 10.96 per cent and physical assets like land grew at 7.59 per cent.

“Direct equity continues to hold the fort in terms of investment preference in India. This shows the belief of investors in the Indian markets notwithstanding the volatility it has been through. We believe that India’s drive towards a ($5 trillion) economy will have a cascading positive effect on individual wealth by 2024,” said Abhijit Bhave, chief executive officer, Karvy Private Wealth in a statement on Wednesday. He expects the ranks of the wealthy to reach one million by FY24.

The International Monetary Fund downgraded expected growth for India from 7 per cent to 6.1 per cent for FY20 earlier in the week. It noted that demand was affected by corporate and environmental uncertainty amid a crisis in the financial sector.

Karvy believes growth will be positively aided by large investments in infrastructure and green energy, along with regulatory reforms. A pickup in consumption is also important, it indicated.

Financial assets, in particular, are expected to lead growth. The total value of financial assets has more than doubled to Rs 528 trillion. This would imply a compound annual growth rate (CAGR) of 15.04 per cent. Physical assets are expected to grow at a CAGR of 10.03 per cent in comparison.

This would mean the share of financial assets, which is now more than 60 per cent, would reach 66 per cent by FY24.

https://www.business-standard.com/article/economy-policy/5-trillion-economy-to-double-individual-wealth-to-rs-800-trillion-karvy-119101600511_1.html  

$5-trillion economy to double individual wealth to Rs 800 trillion: Karvy

Wealth manager Karvy Private Wealth in its tenth annual India Wealth report said the individual wealth is likely to grow at a CAGR of 13.2 per cent to Rs 799 trillion as India becomes a $5-trillion economy. The report estimates this will happen around FY24.

Individual wealth grew at 9.6 per cent to reach Rs 430 trillion over the last year, helped by growth in the financial assets. Financial assets grew 10.96 per cent and physical assets like land grew at 7.59 per cent.

“Direct equity continues to hold the fort in terms of investment preference in India. This shows the belief of investors in the Indian markets notwithstanding the volatility it has been through. We believe that India’s drive towards a ($5 trillion) economy will have a cascading positive effect on individual wealth by 2024,” said Abhijit Bhave, chief executive officer, Karvy Private Wealth in a statement on Wednesday. He expects the ranks of the wealthy to reach one million by FY24.

The International Monetary Fund downgraded expected growth for India from 7 per cent to 6.1 per cent for FY20 earlier in the week. It noted that demand was affected by corporate and environmental uncertainty amid a crisis in the financial sector.

Karvy believes growth will be positively aided by large investments in infrastructure and green energy, along with regulatory reforms. A pickup in consumption is also important, it indicated.

Financial assets, in particular, are expected to lead growth. The total value of financial assets has more than doubled to Rs 528 trillion. This would imply a compound annual growth rate (CAGR) of 15.04 per cent. Physical assets are expected to grow at a CAGR of 10.03 per cent in comparison.

This would mean the share of financial assets, which is now more than 60 per cent, would reach 66 per cent by FY24.

https://www.business-standard.com/article/economy-policy/5-trillion-economy-to-double-individual-wealth-to-rs-800-trillion-karvy-119101600511_1.html  

Alternative Investment Exposures Would Grow Significantly In Coming Years

Over the years, have you observed any discernible behavioural differences in the way UHNI’s approach their investments/portfolios? 

UHNIs are more diligent in allocating funds and are more informed. Transparency in fees and charges is expected and Investors are more cost-conscious. The investment decision-making process for UHNI investors has become more sophisticated, and asset allocation is of prime importance. 

How would you describe the attitude of the majority of UHNI’s towards risk-taking? 

Trends indicate a shift of portfolio exposure towards alternative investments. Direct venture capital investments and absolute return strategies among the most popular investments in UHNIs and Family Offices. Calculated risk-taking and tactical allocations can be seen in portfolios. 

How inclined/disinclined are UHNI’s towards plain vanilla products such as Mutual Funds? Are they more inclined towards investing directly into stocks? 

Core portfolio allocations consist of both Mutual Funds and Direct Stock and Bond Investments. Both approaches go hand in hand and are equally focussed in UHNI portfolios. 

Broadly speaking, how do UHNI’s approach their real estate investment portfolios? Do they prefer to buy land or to invest through vehicles such as REITs? 

Commercial properties and commercial asset funds are popular. Direct investment depends on the ticket size of the property. Land purchases are still done directly as it has a heavy home city bias. 

In your observation, how inclined as UHNI’s towards making angel investments/growth capital investments in start-ups/ VC investments? Do they generally prefer to do these directly or through a fund? 

Initially, these investments were done via VC funds as direct access to such deals was limited. Over the last two years, we have seen a surge in direct deals by Family Offices and UHNI investors. This indicates that the Indian VC industry is maturing at a fast pace. The reason behind this is first, investors do not want to shell out fund management expenses and profit-sharing, secondly, they wish to be a part of the management and decision making in these start-ups providing their network and expertise, and thirdly, they might have synergies with the investee companies for their running business and are looking at these companies as probable takeovers in the future. 

How would you describe the attitude of most of your UHNI clients to philanthropic endeavours? Do you believe that a specific vehicle to this effect, would be of interest to UHNI’s? 

UHNIs usually make philanthropic contributions through their own charitable trust or foundations. They usually dedicate efforts to a cause which may be personal in nature or related to their profession/business which gives them a deep understanding of the issue and makes them better equipped to tackle it. 

What product gaps need to be filled in the Indian market for UHNI’s, compared to more evolved global markets such as the U.S & Europe? 

Venture Capital/Private Equity investments still a minuscule part of the overall portfolio. More sophisticated products on the fixed income side are yet to enter India. Alternative investment exposures would grow significantly in the coming years. 

Do you find resistance within the “old money” UHNI’s towards more complex investment products such as structures? Are they generally more inclined towards traditional avenues such as Bank Deposits? 

The old money has also evolved with changing trends and we see these investors opting for better tax-effective avenues for investments. Though we still see higher exposure to bank fixed deposits and bonds than structured products. 

http://www.businessworld.in/article/Alternative-Investment-Exposures-Would-Grow-Significantly-In-Coming-Years-Abhijit-Bhave/23-10-2019-178032/   

Alternative Investment Exposures Would Grow Significantly In Coming Years: Abhijit Bhave

Over the years, have you observed any discernible behavioural differences in the way UHNI’s approach their investments/portfolios? 

UHNIs are more diligent in allocating funds and are more informed. Transparency in fees and charges is expected and Investors are more cost-conscious. The investment decision-making process for UHNI investors has become more sophisticated, and asset allocation is of prime importance. 

How would you describe the attitude of the majority of UHNI’s towards risk-taking? 

Trends indicate a shift of portfolio exposure towards alternative investments. Direct venture capital investments and absolute return strategies among the most popular investments in UHNIs and Family Offices. Calculated risk-taking and tactical allocations can be seen in portfolios. 

How inclined/disinclined are UHNI’s towards plain vanilla products such as Mutual Funds? Are they more inclined towards investing directly into stocks? 

Core portfolio allocations consist of both Mutual Funds and Direct Stock and Bond Investments. Both approaches go hand in hand and are equally focussed in UHNI portfolios. 

Broadly speaking, how do UHNI’s approach their real estate investment portfolios? Do they prefer to buy land or to invest through vehicles such as REITs? 

Commercial properties and commercial asset funds are popular. Direct investment depends on the ticket size of the property. Land purchases are still done directly as it has a heavy home city bias. 

In your observation, how inclined as UHNI’s towards making angel investments/growth capital investments in start-ups/ VC investments? Do they generally prefer to do these directly or through a fund? 

Initially, these investments were done via VC funds as direct access to such deals was limited. Over the last two years, we have seen a surge in direct deals by Family Offices and UHNI investors. This indicates that the Indian VC industry is maturing at a fast pace. The reason behind this is first, investors do not want to shell out fund management expenses and profit-sharing, secondly, they wish to be a part of the management and decision making in these start-ups providing their network and expertise, and thirdly, they might have synergies with the investee companies for their running business and are looking at these companies as probable takeovers in the future. 

How would you describe the attitude of most of your UHNI clients to philanthropic endeavours? Do you believe that a specific vehicle to this effect, would be of interest to UHNI’s? 

UHNIs usually make philanthropic contributions through their own charitable trust or foundations. They usually dedicate efforts to a cause which may be personal in nature or related to their profession/business which gives them a deep understanding of the issue and makes them better equipped to tackle it. 

What product gaps need to be filled in the Indian market for UHNI’s, compared to more evolved global markets such as the U.S & Europe? 

Venture Capital/Private Equity investments still a minuscule part of the overall portfolio. More sophisticated products on the fixed income side are yet to enter India. Alternative investment exposures would grow significantly in the coming years. 

Do you find resistance within the “old money” UHNI’s towards more complex investment products such as structures? Are they generally more inclined towards traditional avenues such as Bank Deposits? 

The old money has also evolved with changing trends and we see these investors opting for better tax-effective avenues for investments. Though we still see higher exposure to bank fixed deposits and bonds than structured products. 

http://www.businessworld.in/article/Alternative-Investment-Exposures-Would-Grow-Significantly-In-Coming-Years-Abhijit-Bhave/23-10-2019-178032/   

HNIs return to realty

Over the past 12-18 months, HNI investors have been slowly returning to real estate as an investment option, according to private wealth managers. However, given how they burnt their fingers back in 2008, this time around, the investors are more interested in lending to developers rather than buying equity.

More structured debt now

Abhijit Bhave, CEO, Karvy Private Wealth, said he’s observing a selective return of rich individual and institutional investors to this asset class. “But now, the investment is increasingly coming in through rental yield funds. Earlier, around 2007 for instance, investors bought pure equity in real estate projects or created a special purpose vehicle for these investments. Now, it’s more structured debt with an equity kicker involved,” he added.

“To put it in layman’s language,” Bhave explained, “a private equity fund may lend money to a builder at say 18-20 per cent interest. That’s the debt component.

“Then, if the plan was to sell, say 100 apartments at ₹20,000 a sq. ft. and he ends up selling them at ₹30,000 a sq. ft., the fund earns a part of this profit as well — that’s the equity kicker.”

A recent report by global real estate consultancy Cushman & Wakefield found that inflows in the sector increased 40 per cent in the first quarter of 2016 at ₹3,840 crore, with both the total number of deals and average deal sizes rising year-on-year.

Karvy’s India Wealth Report 2015 said total assets under real estate funds were estimated to be ₹10,976 crore in FY15. Of this, individual contribution was expected to be ₹3,622 crore, about 8 per cent on a rich individual investor’s investible surplus.

In the new arrangement, Bhave added, even when real estate is doing badly, the lender makes money, since “a rental yield fund is more an indirect financial investment in real estate.

“Though the asset class is primarily real estate, it’s debt exposure. The true blue real estate funds of the past are not back yet.”

Ashish Bhalla, Senior Vice-President and Business Head, Arthveda Fund Management, which focuses on affordable housing for middle- and low-income groups, said real estate is increasingly becoming an HNI game, with the minimum investment at ₹1 crore.

“We’ve been able to deliver 30 per cent CAGR in the last three years. We see the market picking up further as the first REITs are introduced.” Real Estate Investment Trusts are structured as capital market instruments, where an investor can buy a unit in a listed real estate project the same way he buys a share on a stock exchange.

Finding tenants, a big issue

“The biggest risk with a rental yield fund is that the asset might not find tenants,” Bhave concluded.

“But real estate investors say the market bottom is behind us, and in three to four years, we will see an upturn in the market again. With a rental yield fund, investors get a return of anywhere between 8 and 12 per cent, but that depends on location and your luck.”

https://www.thehindubusinessline.com/markets/stock-markets/hnis-return-to-realty-this-time-via-new-route/article8581359.ece 

HNIs return to realty, this time via new route

Over the past 12-18 months, HNI investors have been slowly returning to real estate as an investment option, according to private wealth managers. However, given how they burnt their fingers back in 2008, this time around, the investors are more interested in lending to developers rather than buying equity.

More structured debt now

Abhijit Bhave, CEO, Karvy Private Wealth, said he’s observing a selective return of rich individual and institutional investors to this asset class. “But now, the investment is increasingly coming in through rental yield funds. Earlier, around 2007 for instance, investors bought pure equity in real estate projects or created a special purpose vehicle for these investments. Now, it’s more structured debt with an equity kicker involved,” he added.

“To put it in layman’s language,” Bhave explained, “a private equity fund may lend money to a builder at say 18-20 per cent interest. That’s the debt component.

“Then, if the plan was to sell, say 100 apartments at ₹20,000 a sq. ft. and he ends up selling them at ₹30,000 a sq. ft., the fund earns a part of this profit as well — that’s the equity kicker.”

A recent report by global real estate consultancy Cushman & Wakefield found that inflows in the sector increased 40 per cent in the first quarter of 2016 at ₹3,840 crore, with both the total number of deals and average deal sizes rising year-on-year.

Karvy’s India Wealth Report 2015 said total assets under real estate funds were estimated to be ₹10,976 crore in FY15. Of this, individual contribution was expected to be ₹3,622 crore, about 8 per cent on a rich individual investor’s investible surplus.

In the new arrangement, Bhave added, even when real estate is doing badly, the lender makes money, since “a rental yield fund is more an indirect financial investment in real estate.

“Though the asset class is primarily real estate, it’s debt exposure. The true blue real estate funds of the past are not back yet.”

Ashish Bhalla, Senior Vice-President and Business Head, Arthveda Fund Management, which focuses on affordable housing for middle- and low-income groups, said real estate is increasingly becoming an HNI game, with the minimum investment at ₹1 crore.

“We’ve been able to deliver 30 per cent CAGR in the last three years. We see the market picking up further as the first REITs are introduced.” Real Estate Investment Trusts are structured as capital market instruments, where an investor can buy a unit in a listed real estate project the same way he buys a share on a stock exchange.

Finding tenants, a big issue

“The biggest risk with a rental yield fund is that the asset might not find tenants,” Bhave concluded.

“But real estate investors say the market bottom is behind us, and in three to four years, we will see an upturn in the market again. With a rental yield fund, investors get a return of anywhere between 8 and 12 per cent, but that depends on location and your luck.”

https://www.thehindubusinessline.com/markets/stock-markets/hnis-return-to-realty-this-time-via-new-route/article8581359.ece 

Individual wealth in financial assets to touch Rs 528 trillion

Indian households’ appetite for equities is set to increase manifold in the next five years. According to Karvy Wealth Report 2019, individual wealth in financial assets is projected to more than double to reach Rs 528 trillion in FY 24 from the current Rs 262 trillion. Of this, direct equity will constitute the highest share at 26%.

Currently, individuals hold Rs 52 trillion in direct equity, which is expected to reach Rs 136 trillion in FY24. India has 5,000 listed companies, second only to US, in terms of investment universe, which could provide immense opportunity for investors to participate in the wealth creation story.

After direct equity, fixed deposits and bonds will occupy the second position at 15% share or Rs 79 trillion of the total individual wealth pie (Rs 528 trillion) in FY24. Insurance assets will constitute the third largest slice of the pie at Rs 72.49 trillion. Currently, individuals hold Rs 13.77 trillion in mutual funds, which is expected to increase at a CAGR of 18% to reach Rs 31.92 crore in FY24. Less than 2% of 1.3 billion Indians currently invest in mutual funds, providing a huge opportunity for advisers.

Financial assets now constitute 61% of total individual wealth in India. By FY24, the report estimates that the share of financial assets in total individual wealth will increase to 66.11% while that of physical assets will be at 33.89%. Total individual wealth (financial and physical) is expected to increase from the current Rs 430 trillion to 798 trillion in FY24.

https://www.morningstar.in/posts/55379/individual-wealth-financial-assets-touch-rs-528-trillion-fy24.aspx 

Individual wealth in financial assets to touch Rs 528 trillion by FY24

Indian households’ appetite for equities is set to increase manifold in the next five years. According to Karvy Wealth Report 2019, individual wealth in financial assets is projected to more than double to reach Rs 528 trillion in FY 24 from the current Rs 262 trillion. Of this, direct equity will constitute the highest share at 26%.

Currently, individuals hold Rs 52 trillion in direct equity, which is expected to reach Rs 136 trillion in FY24. India has 5,000 listed companies, second only to US, in terms of investment universe, which could provide immense opportunity for investors to participate in the wealth creation story.

After direct equity, fixed deposits and bonds will occupy the second position at 15% share or Rs 79 trillion of the total individual wealth pie (Rs 528 trillion) in FY24. Insurance assets will constitute the third largest slice of the pie at Rs 72.49 trillion. Currently, individuals hold Rs 13.77 trillion in mutual funds, which is expected to increase at a CAGR of 18% to reach Rs 31.92 crore in FY24. Less than 2% of 1.3 billion Indians currently invest in mutual funds, providing a huge opportunity for advisers.

Financial assets now constitute 61% of total individual wealth in India. By FY24, the report estimates that the share of financial assets in total individual wealth will increase to 66.11% while that of physical assets will be at 33.89%. Total individual wealth (financial and physical) is expected to increase from the current Rs 430 trillion to 798 trillion in FY24.

https://www.morningstar.in/posts/55379/individual-wealth-financial-assets-touch-rs-528-trillion-fy24.aspx 

Individual investor wealth up 10% at ₹430-lakh cr

Individual investor wealth across various investment avenues registered an impressive growth of 10 per cent to ₹430-lakh crore last fiscal compared to ₹392-lakh crore logged in the financial year ended March 2018.

According to 10th Karvy Private Wealth report released here on Wednesday, individual investors’ wealth in financial asset increased 11 per cent to ₹262-lakh crore (₹236-lakh crore) with direct investment in equity, fixed deposit and insurance topping the chart.

Investments in physical assets such as real estate and gold increased eight per cent to ₹167-lakh crore (₹156-lakh crore) in FY19. The proportionate of financial assets has moved up to 61 per cent from 57 per cent in the last five years.

Interestingly, investments in gold exchange traded fund (ETF) fell five per cent to ₹2,661 crore against ₹2,798 crore in FY18 largely due to emergence of sovereign gold bond which attracted an investment of ₹7,960 crore (₹6,960 crore).

Karvy Private Wealth estimates individual wealth in India to touch ₹799-lakh crore in the next five years with allocation to financial assets accounting for 66 per cent and that of physical assets touching 34 per cent.

Abhijit Bhave, Chief Executive Officer, Karvy Private Wealth, said notwithstanding the volatility, direct equity continues to hold the fort in terms of investment preference, reflecting investors belief equity markets.

“We believe India’s drive towards a $5-trillion economy will have a cascading positive effect on the individual wealth by 2024. We expect the HNI population to touch one million over the next five year,” he added.

Direct investment in equity is set to register the highest growth rate of 21 per cent to touch ₹136-lakh crore in five years from ₹52-lakh crore currently. Fixed deposit and bonds will grow at 12 per cent CAGR to hit ₹80-lakh crore (₹46-lakh crore), according to Karvy report.

https://www.thehindubusinessline.com/markets/stock-markets/individual-investor-wealth-up-10-pc-at-430-lakh-crore/article29708647.ece