Global financial services giants may once again be mulling an entry into the India’s asset management industry. According to four bankers aware of developments, USA’s JP Morgan and BNY Mellon are said to be exploring an entry into India’s asset management industry. Sources say both firms are ready with their India strategy to operate in the Asset Management Company (AMC) business and have hired headhunters for recruiting human resources.
While timelines for approaching the market regulator SEBI to seek licenses to operate in the AMC business isn’t known, both firms plan to start their operations in the next 12 – 18 months, according to sources. Interestingly, if plans fructify, this would be JP Morgan’s re-entry into India’s AMC market after it decided to exit the Indian market in 2016.
Email sent to BNY Mellon remained unanswered till press time, while spokesperson for JP Morgan declined to comment on the development.
Different strategies
Pegged as one of the fast-growing sectors in India’s financial services industry poised to manage $5455 billion worth of assets by 2031, BNY Mellon and JP Morgan are said to have different approaches to enter the market. While BNY Mellon is said to have charted out a pure-organic blueprint for the Indian market, JP Morgan is believed to be more flexible to consider various options for a comeback in India’s asset management industry.
“JP Morgan is looking at a few companies for acquisition and it is also open to equity partnerships with existing players,” said a person aware of the matter. Even in terms of manpower recruitments, BNY Mellon is understood to interview candidates for across positions whether leadership, mid-management or junior level employees, whereas JP Morgan is presently looking at senior to mid-management positions. “They (JP Morgan) haven’t started the hunt for leadership team yet,” said a person familiar with the development.
BNY Mellon is keen to enter India with its own products and distribution channel. JP Morgan’s execution strategy isn’t clear yet.
India comeback
Blackrock, which joined hands with Jio Financial Services to launch an AMC is said to have triggered JP Morgan to relook at its India strategy.
“Once a go-ahead comes through for Jio-Blackrock JV from SEBI , it will give a direction to JP Morgan on how they can position themselves in India,” said a senior executive privy to the matter.
To put things in perspective, Blackrock exited India’s AMC market in 2018, when it dissolved its partnership with DSP. Nearly five years later, it announced its re-entry to India through a 50:50 joint venture with JFS in July last year. After about a decade of existence in the India, JP Morgan sold its AMC business to Edelweiss in 2016.