Two funds — one from Kotak Mahindra Bank and another from Fidelity — have already tapped Australian retail investors. Now, according to Rashmi Hansi Mehrotra, the principal business leader for investment consulting at Mercer, adviser to the world’s largest funds, a third fund will soon tap the Australian retail market for investing in the booming Indian equity markets.
Kotak Mahindra collected $69 million last year through India Equity Fund, which rose by 45% in value $100 million as of December 2007.
The other fund that collected money from Australian retail investors is Fidelity’s Fiducian India Fund. “There is a big retail investor market waiting to be tapped.
Australia is the fourth largest retail market with 25 million people. The rule that 9% of salaries of Australian investors should be locked in superannuation schemes till 65 years forces them to invest in attractive markets like India.
Fidelity’s Fiducian India Fund is a blended portfolio of stocks selected by two Indian fund managers, State Bank of India Funds Management and Sundaram BNP Paribas Asset Management. SBIFM focuses on large-cap stocks, while Sundaram focuses on mid-cap stocks.
Indian stock markets have all kinds of investors, including offshore hedge funds, endowment funds and pension funds.
Wall Street banks such as Citigroup, Merrill Lynch, Fidelity, Goldman Sachs, Morgan Stanley, among others, raise funds for India from their overseas clients. They are also managing funds of their Indian clients through the private banking business.
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