Portland-based Aginsky Consulting Group (ACG), a boutique management-consulting firm which helps small and mid-cap companies, and individuals make investments in the US market, is currently managing roughly $15 million worth of assets for its Indian and NRI clients. Yurop Shrestha, Vice President, South Asia, ACG, talks to Sarika Malhotra about the growing Indian interest to invest in the US.
Q. What potential does the Indian market holds for ACG?
A. Our primary target clientele is the high net worth individual (HNWI) segment. As of 2011, there were 251,000 HNWIs with a combined wealth of more than $1,000 billion. By 2015, the number is expected to grow to 465,000 and the total wealth held by them (HNWIs) is expected to more than double. In other words, the potential that the Indian market holds for us is massive. In addition to a fast-growing target clientele, they (the Indians) are also getting more sophisticated as investors and increasingly demanding non-traditional investments that allow them to diversify their portfolios and preserve wealth in the long term. Our client is typically a HNWI who is worth at least Rs 50 crore and looking to invest at least Rs 6 crore ($1 million) overseas. ACG will look to fulfil this demand in the Indian market.
Q. What sectors in the US have seen the maximum investment from India?
A. The US has received roughly $6.5 billion since mid-2011. Since we entered the Indian market (August 2013), roughly $1.3 billion has been invested in the US. The sector that has seen the most investment is the manufacturing sector ($762.36 million), followed by community, social, and personal services ($109 million), construction ($107 million), wholesale, retail trade, restaurants and hotels ($61.5 million), and agriculture and mining sectors ($30 million).
Q. Is there a growing Indian interest for investing in the US real estate?
A. India has historically been one of the largest foreign investors in US real estate, consistently ranking in the top 5 foreign countries. In the year ending March 31, 2013, Indians bought roughly $3.5 billion of US real estate. Although India's share of foreign investment in US real estate has fallen to five per cent in 2013 from nine per cent in 2009, the demand is very healthy. From our conversation with potential clients and with the hundreds of people we meet via seminars, there seems to be an avid interest in investing in US real estate.
Q. Do you have any tailor-made strategies to cater to the Indian investors?
A. Our company's asset management division can be divided into three main verticals - real estate, EB-5 (immigration investment program allowing foreign investors to receive a Green Card), and private equity and M&A (mergers and acquisitions). For India, we are primarily focusing on the first two categories. There is no other player in the Indian market currently that provides the client with an 'A-to-Z' service offering under one roof in those categories, whereas the competition in the outbound M&A and private equity space is fierce. We are also introducing some new products in order to get potential clients to come to the US to look at investment assets there. One of them is an investor tour where a group of investors will visit businesses, look at properties, meet local politicians/businessmen, etc., instead of making the typical sightseeing rounds. By introducing such marketing programmes, we are definitely being more innovative in India compared to other markets where our client base is already well established.