Cash-rich investors from the UAE and the larger Middle East region will be among the focus target groups for star Indian entrepreneur Nikhil Kamath’s maiden wealth fund, set to be launched later this week.
The fund, to be launched by Kamath’s investment venture True Beacon, aims to mop up $100 million in the first year of operation.
True Beacon’s wealth fund will have a minimum investment level of $1 million for overseas investors.
“True Beacon already has good traction with the Middle East investors with our track record of high returns on investments in our existing alternate investment funds (AIFs). I am sure this will work to our advantage in attracting investors from the region in large numbers,” Nikhil Kamath, co-founder and chief investment officer of True Beacon and Zerodha, told Arabian Business in an exclusive interview.
Kamath shot to fame globally when Zerodha, his retail trading platform, became the first startup to become a unicorn without a single penny of external investment.
“We expect Middle East investors to account for 25-30 percent of our wealth fund,” he said.
Kamath’s new fund, which marks his foray into the wealth management segment, will manage wealth for leading entrepreneurs, individuals, families and institutional investors.
True Beacon’s wealth fund proposes to invest mainly in the Indian market and in stocks, commodities and debt instruments.
“We will be mainly investing in publicly listed companies initially, and at a later stage may look at investing in private companies.”
Kamath also revealed that his wealth fund will charge a much lower fee from customers for handling wealth fund services – one percent or lower as against a 2-4 percent market rate – which will be a big attraction for both overseas and domestic investors in the fund.
“Besides, current taxation [in India] levels work better for PMS investors,” Kamath said.
Uber rich investors from UAE and the GCC region – both expats and nationals – account for a significant chunk of True Beacons existing AIFs – True Beacon Fund 1 and True Beacon Global.
AIFs are pooled funds which make bulk investments in stocks and private investments, while wealth funds run individual portfolio management services.
Kamath said True Beacon will be holding road shows in Dubai and other major cities in the Gulf next month to interact with investors from the region.
The ace investor, who dropped out of school to pursue his passions – playing chess and trading –is not perturbed about the timing of the launch of the wealth fund – at a time when markets around the globe are seeing a rout, due to increasing concerns on rising inflation, supply concerns and surging crude prices.
“On the contrary, I think this is the right time to invest when markets have already corrected to a significant extent.”
Kamath also said there was still a lot of appetite for investing in India.
“If you look at it, the correction in the Indian market was less than that in the US and other Western markets. There are many factors – including a relatively stronger economy – which are advantageous for investing in India.
He also felt the phase of large-scale foreign fund pull out from India could be getting over soon, and foreign investment inflows would be turning positive soon.
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