EFG ventures into wealth management in India

The Swiss private banking group acquires a 75% stake in Stratcap Securities India.
Private banking group EFG International will acquire 75% of Stratcap Securities India to launch its entry into wealth management in India.

EFG, a Zurich-headquartered private banking and asset management firm, will establish a base on the ground in India via the acquisition of Stratcap. It will benefit from both Stratcap's existing base of CHF700 million ($607 million) in assets under management and the firm's employee base of 24 people including founder, Atul Sud, who will become chairman of EFG Wealth Management India.

The two firms did not disclose details of the consideration.

Sud worked in a number of positions in American Express Bank in India before he set up Stratcap in 1995. Stratcap is licensed to offer a range of financial services to a private and institutional client base spanning mutual funds, fixed income and equities. It is a member of both of IndiaÆs main stock exchanges, the Bombay Stock Exchange and the National Stock Exchange.

EFG already covers the non-resident Indian community in Asia, the Middle East and Europe and Stratcap provides a complementary, onshore presence. EFG, which is listed on the SWX Swiss Exchange, currently operates in 50 locations across 30 countries.

EFG has also announced that it has hired Shankar Dey to become CEO for India. Dey is an industry veteran who has worked across investment banking and private banking with Citi and NM Rothschild.

Asia is becoming the new target market for private banks as the increasing number of high-net-worth individuals on the continent creates large opportunities for providers of wealth management services. Within Asia, China and India are perceived as highest potential by a number of firms thus the interest in setting up shop on the ground. But banking in India is still regulated and some wealth managers have been waiting for a number of years on relevant licenses to offer onshore services. The route EFG has adopted gives them a head-start in this market.

The deal is subject to regulatory approvals, which are expected in the first quarter of 2008.
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