Sanlam Investment Group Chief Executive Carl Roothman sees an opportunity to increase the group’s shareholding in Shriram’s asset and wealth management businesses. India is one of the three key markets for the company, he tells Ananya Grover and Mahesh Nayak in an interview. Excerpts:
What are your plans with Shriram?
Our focus is on emerging markets. South Africa, the rest of Africa and India are the three growth areas for us. The 20-year partnership that we have had with Shriram has actually been very successful. Today, there is an opportunity with Shriram to increase our shareholding in the asset management and wealth management business. Shriram had ambitions to deepen the penetration of financial services in the asset management and wealth management sides. Our strength is that we understand wealth management and emerging markets very well. We can use the brand and distribution of Shriram and bring our expertise – how we look at portfolio construction, our research capabilities and the investment strengths to make them successful. Our ambition is to be among the top 15-20 asset management companies in India.
What is the road map to achieve this ambition?
We are number one or two in active management, indexation, wealth management and alternative asset management in South African countries where we operate. Sanlam is number one in insurance. We definitely would want to become one of the major players in India as getting flows becomes easier then. In every country, top 15-20 players account for roughly 60-70% of the market.
The initial plan is to get to roughly $3 billion as a first kind of target. We we need to make sure that products make sense. We should also have the right investment team that performs on the ground, so that you can go to distributors and tell them a very good story. I think it will take another six months to stabilise the investment process. Then, hopefully, through that distribution, we’ll start growing. We expect to reach $3 billion within four-five years and then grow from there. We are bringing in experienced executives with proven track records. We have just hired a portfolio manager from BlackRock.
What are the global trends you are witnessing in the industry?
Globally, three-four distinct trends are being witnessed. The first one is customisation – you don’t just build products anymore, but also solutions for clients, and that’s what we’ve done quite successfully. The second one is that there has been a shift from active to passive and ETFs because there’s more liquidity. Clients seek transparency. We are also quite strong in that. The third one is to offer alternatives to bring a bit of different correlations to the portfolio. So, we’d also be quite interested to offer our alternative capability, maybe bring a bit of private credit opportunities to the market and blend that with different portfolios.
In terms of products, anything you want to replicate in India from your global experience?
Roughly about 50% of our $80 billion sits outside of South Africa. Africa is very similar to India in terms of regulations and background. I don’t think we would bring global products to India. What we would rather bring are expertise to build solutions, packaging and pricing of products and the performance. I think that will be a game changer. For clients who want to take money offshore, we do have very good products that are globally well-established with a good track record.
How are offshore clients looking at India?
We have a global emerging markets fund, with a big allocation to India. A lot of our clients are interested in the Indian economy and we also have an Indian opportunities fund. The world is going to become more regionalised, and India is going to stand out in that environment because it is the fastest-growing economy in the world. There’s going to be a big requirement for clients to invest in India. We would definitely try and build more products globally to facilitate that.
