Avendus targets $7-bn AUM in wealth management space

Mumbai: Avendus Wealth is planning big on the wealth management business and aims to have assets under management worth $6-7 billion by the end of this fiscal.

Avendus Wealth had closed last fiscal year with an AUM (Assets Under Management) of a little over $3.03 billion or Rs 22,730 crore, which grew to $5.3 billion (Rs 39,824 crore) at the end of December 2021. It expects to close this fiscal with around $6-7 billion (Rs45,000 crore to Rs 52,000 crore) as the number of rich people has grown exponentially during the past two years of the pandemic, increasing the demand for professional wealth managers, Ranu Vohra, Avendus Group's Co-Founder and Executive Vice Chairman, told PTI.

Going by the current AUM, Avendus Wealth is among the top five players that is dominated by IIFL and Kotak Bank and it hopes to be among the top three over the next few years, he said. Avendus Wealth manages the assets of 1,700 rich families/ ultra high net worth individuals.

The wealth management vertical is witnessing a very robust growth and therefore the higher target, Vohra said. Prior to co-founding Avendus in 1999,he was with Communications Equity Associates, the Tampa-US-based technology and media investment bank, and Hinduja Finance. Last two years have given many of us the seat-belts, induced by the accelerated adoption of the digital medium. And 2022 so far looks good with the rich having developed increased risk appetite, he said, adding that doing and being digital has become a habit. This is evident from the heavy fund inflows into the digital startups space because family offices are no longer putting money into traditional assets but going into equities, alternative assets and fixed income, among others.

"This was evident from our advisory and investment banking verticals for which the past two years were record breaking," he said. In 2021, Avendus closed as much as 53 deals worth $13 billion, making it the largest standalone investment bank in the country and the second largest in Asia after Goldman Sachs. While the number of dollar billionaires grew from 102 to 142 in 2021, as much as 84 percent of households in the country suffered a decline in their income in 2021, Oxfam India said last month.

Going forward, Vohra expects Avendus to be moving towards alternative assets to generate alpha for its clients. And one of the ways of achieving that is getting into venture capital funding, he said, adding the rich in the country today are highly under-invested in alternatives, which is not a good trend in wealth creation. Alpha refers to generating high returns.

With this in mind, Avendus has created the second future leaders fund targeted at late stage assets. This fund has so far raised Rs 1,500 crore and the response was so good that the fund was pre-closed, hes said, adding their first fund was a Rs 375 crore. Currently, the group has four verticals -- investment banking, wealth management, lending/ NBFC, and asset management. The group's asset management vertical manages Rs 11,000 crore worth assets. This includes hedge fund and PMS (Portfolio Management Services) while the credit fund (future leaders fund) and lending book is around Rs1,200 crore and its total disbursements stood at Rs3,200 crore.

On the recent acquisition of the equity broking business of the Chennai-based Spark, Vohra said the missing link was equity broking and with the buyout, he expects more than half of the group profit to come in from this vertical now.

Vohra said the group is not joining the IPO frenzy as they are still busy building the business, which is being driven by the four engines of investment, credit business, asset management and wealth management.