EFG International, a Zurich-headquartered private banker and wealth manager has agreed to acquire a 75% stake in Mumbai-based Stratcap Securities India.
MUMBAI: EFG International, a Zurich-headquartered private banker and wealth manager has agreed to acquire a 75% stake in Mumbai-based Stratcap Securities India (SSI), which manages individual as well as institutional client relationships in India encompassing mutual funds, fixed income and equities.
The stake is being bought from SSI’s parent Strategic Capital Corporation, majority owned by its founder, Atul Sud.
According to a press release on EFG’s website, the transaction is expected to be completed during the first quarter of 2008, subject to regulatory approval. The terms of the deal have not been disclosed.
Stratcap Securities will be rechristened EFG Wealth Management India, and Sud will be its chairman. Shankar Dey, who has held senior roles at Citibank and NM Rothschild, will join as the company’s chief executive officer.
“India is an attractive opportunity for us, reflecting dynamic economic growth and strong entrepreneurial wealth creation. The acquisition of Stratcap Securities India offers significant benefits, and I believe our entrepreneurial credentials will enable us to connect with both prospective clients and client relationship officers,” said Lonnie Howell, CEO of EFG International, in a release.
EFG International’s group of private banking businesses currently operate in 50 locations in over 30 countries, with around 2,000 employees.
The company, whose biggest shareholder is Greece’s Latsis family, has its shares listed on the Swiss Exchange. It is part of the EFG Group, the third-largest banking group in Switzerland, by Tier-1 Capital.
Of late, a number of international players have been going aggressive on India’s financial services space. Late last year, French bank BNP Paribas acquired a 33.35% stake in Kerala-based Geojit Financial Services for Rs 207 crore.
More recently, Merrill Lynch acquired a stake in Bluechip Corporate Investment Centre, a Mumbai-headquartered financial products distribution house.
The rationale for EFG’s entry, stated in the press release, sums up the enthusiasm of foreign players to enter the Indian market: “It provides entry to the Indian wealth management market, in keeping with EFG International’s strategic goal of capitalising on new growth markets. It will complement existing coverage of the non-resident Indian community in Asia, Middle East and Europe.”
Besides, “SSI has an established client base, and there will be scope to extend capabilities in order to broaden and deepen client relationships.
SSI has seats on the National and Bombay Stock Exchanges. It provides a foundation for future growth in terms of existing employees, premises and back office support; licenses covering the provision of a range of local wealth management services; and a domestic IT platform.”
Adds Sud, founder of Stratcap Securities in the release, “This is good news for all those associated with Stratcap Securities India.
Employees can look forward to becoming part of an organisation with ambitious plans for India, effectively taking the business to a higher level. Our clients stand to benefit from an enhanced offering, and can rest assured that we remain committed to providing the same excellent service.”
Sud held a number of senior roles in American Express Bank in India, before setting up Strategic Capital Corporation in 1995. The management team and employees of SSI will remain in place, providing continuity to clients as well as local market and technical know-how.
sanat_vallikappen@dnaindia.net
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