Last year, when markets were doing badly there was no dearth of opportunity in the debt space, Satya Bansal, CEO, Barclays Wealth, tells Tania Kishore Jaleel. Edited excerpts:
Last year equities fared badly. Did it give rise to new ideas?
When the equity market was in doldrums, there were enough opportunities in the debt space. There are enough ideas where clients can co-invest in businesses and so on. The ideas are not just in the financial markets but in businesses too, which allow them to see a whole range of solutions.
Asset classes have not become innovative, investment strategies have. For example, in the debt space, you can operate differently. You can play on duration, yields, arbitrage, government securities and corporate bonds. We can see these anomalies and how to execute the best possible investment idea in that anomaly at that point in time.
The number of wealth managers has been increasing. How do you see the space?
Wealth management is very loosely defined and operated with different business models. We focus on high net worth and ultra high net worth individuals. A large part of our clients are from top-end and mid-market business families. They have views across markets, credit and are interested in putting the right structure for continuation of their businesses.
We operate in all three spectra. Our business model is like that of a private investment bank. For most of our clients, personal and business wealth tend to overlap as the businesses are family-owned. They look for solutions that encompass their business cycle and business growth and put a structure for the next generation to take over. We do not compete with most players in the product distribution space, who carry a product-specific target.
How has Barclays Wealth been doing?
We have grown at a compounded rate of upwards of 35 per cent in two years. Our business is growing at above-industry rates of 18-20 per cent. This is due to the relationship we share with our clients.
Are many Indian corporations going for succession planning?
We are involved with many families in implementing structures to help achieve long-term succession planning objectives. This is done at the promoter-family level rather than at a corporate level, and involves an understanding the family dynamics, risks to business, personal wealth and the legal and tax implications. Our strong local presence and vast global experience have helped us achieve a leadership position.
Stocks markets have rallied this year. Are you surprised?
The rally was expected, but not the pace. Three factors are leading the rally now. Towards end-2011, there was a lot of negative news on monetary tightening by the Reserve Bank of India, current account deficit, policy paralysis, situation in Europe and general global slowdown. These issues have been factored in by the markets. Things cannot get any worse from here on. It should be a positive surprise as and when things do change. There are signals that interest rates may soon be relaxed. The Budget will thus be very important this year. Secondly, recovery in the US is gaining more credibility. That should counter-balance what is happening in Europe.