UBS Looks to Tap India’s Private Wealth Market 

Swiss wealth management giant UBS closed up some of its business lines in India about a decade ago, but it may be ready to take another shot at the Billionaire Raj.

The Swiss bank wants to expand its wealth management business in India and is considering buying a stake in a local firm to give it a foothold in the prized economic region, according to Bloomberg. With India’s economy and upper class growing, UBS won’t be the only foreign company scrambling to compete with home-grown firms.

Rupee Rush

India’s GDP is projected to add $730 billion annually through 2028, according to the Boston Consulting Group, and by the end of last year, India’s top 1% of earners owned roughly 40% of the country’s wealth, the highest concentration in six decades. Plenty of that wealth is being courted by local groups like ICICI, Kotak Mahindra Bank, and Axis Bank. But foreign investors are throwing their hats in the ring, too.

BlackRock agreed to a joint venture with India’s Jio Financial Services in July as a means of entering the country’s asset management industry. In 2022, Bain Capital acquired a roughly 25% minority stake in IIFL Wealth Management (now 360 One WAM), which recently raised $500 million for its debut secondary fund. And just this month, South Africa’s Sanlam said it will add a joint venture to its partnership with Shriram Capital Group to offer wealth and advice services in the subcontinent. It wouldn’t be out of the ordinary for UBS to go down the joint wealth venture route in India as it does the same with firms in China and Japan. 

Putting Up Numbers: If you look at India’s stock market, it’s no wonder wealth managers are ready to pounce:

• Just like UBS, local investors are also aggressively diving into India’s market. As of the end of August, assets in Indian mutual funds reached a record $794 billion, according to the Association for Mutual Funds in India.
• Proceeds from IPOs in India reached $4.7 billion in the first half of the year, a 127% increase from H1 2023, Ernst & Young reported. 
• The Sensex, the Bombay Stock Exchange’s S&P 500, and the Nifty 50 indices are up 13%, 21%, and 15% year-to-date, respectively. 

Also, China’s slowing economy and rising geopolitical tensions have caused businesses like Apple and Samsung to diversify beyond the Middle Kingdom, finding a new home for some of their operations in India.