According to Bhandari, who is also a board member of the Association of Portfolio managers in India (APMI), almost 70% of the institutional capital in the PMS room is now managed by players without traditional institutional support – a sign that investors are increasingly confidence in independent and boutiques house.
He attributes this trend to the growing openness of the sector, diversity of strategies and the “democratization” of money management, where talent and performance begin to generate the brand name and inheritance.
Edited fragments:
Kshitij Anand: I wanted to understand you – the geopolitical environment changes and it changes faster than we could imagine. New tariff rules arrive and China plays its own game. How do you think everything is currently forming – good for India, bad for India?
Manish Bhandari: Yes, absolutely – and that is the beauty of the geopolitical landscape – it changes so quickly. When Trump came in, everyone thought we would have a lead because of our long -term relationship, but that was not explained in terms of results, and another scenario has now been noticed.
What today is interesting and brewing is in my opinion a new, very solid economic partnership that takes shape. There has always been a relationship between India and Russia, but now, with China, everything seems pretty positive and we make a favorable sentiment. When such a large economic block comes together, strong markets open for each other and collaboration increases. Although there is a structural headwind until the tariff problem between India and the US has been resolved, there is also a structural dividend in the long term if this partnership makes material this morning, we have heard that the national security adviser flew to Russia visits are now frequently and generally published. Perhaps the frustration in America is partly due to building this new economic block. I deliberately use the word “economic block” because my focus is on economic progress and structural changes – no cultural aspects – that are secondary. My feeling is that Russia played a key role in bringing India and China closer.
Kshitij Anand: And although there will be people at home who may not welcome or appreciate this development of India – China – is it no longer because it is more political than financially – economically, we can take advantage of the partnership?
Manish Bhandari: The human brain will last for a long time in luggage, but as the story changes, that luggage will also change. I believe that this shift is happening before our eyes, and it is in the interests of both governments to make it work. I see progress daily. While it pops up on the front pages of newspapers, public perception will also shift.
Kshitij Anand: Let’s talk about sectors now. How do you view the sectoral landscape for the coming years? What can the Alfa generators of the future be?
Manish Bhandari: Rates can change at night – 10%, 20%, 25% – so making a definitive prognosis should be smarter than the tweets of the US president, what I am not, and I am sure that nobody of us is. To make a compelling investment bet, you need two things: an increasing sector and reasonable ratings. A great story with stretched ratings does not work.
Infrastructure expenditures seem to have been picked up again after a difficult election year. Cement looks promising. Healthcare also remains evergreen. The US still have a considerable dependence on Indian health care, so despite every market pushback, Indian companies have a strong growth potential.
Kshitij Anand: We have seen the New Age companies get a grip in recent years. IPOs are delayed, but the SME space is booming – more than 600 IPOs are mentioned. Are there new thematic companies that attract your attention?
Manish Bhandari: Not all those 600 IPOs are New-Age companies. For me, “New Age” means that traditional companies strengthen technology to grow faster and to disturb established operators. These are spread over small and midcaps and must be selectively chosen.
Auto Ancillary is another ‘old school’ sector with new opportunities that are getting away from India’s. Currently, opportunities are spread over sectors – there is no dominant theme as we saw in earlier cycles.
Kshitij Anand: On PMS-De Industrie has evolved quickly, especially post-retarded, with considerable inflow. We also often see new strategies launched. Is this good or bad for the industry?
Manish Bhandari: The expansion of the market is always good for the industry – there is no second thought. There are many strategies because it is a pretty democratic system where everyone who wants to manage money to external or third parties come in today. Otherwise, the only remaining platform for a work in an investment fund and launching your own investment fund was almost impossible.
So it is a considerable democratic expression of investing – different strategies, different ways to look at the market – everything keeps competition at a fairly high level and everyone can learn from each other. I find it exciting.
The majority of growth also comes from EPFO Capital and less from retail capital. But one thing I can tell you, which is very interesting is that if you look at the PMS industry and the landscape, and the advisory capital that is built, 70% of the institutional capital are given to people who have a non-institutional background. They are not supported by institutions with a large investment fund type.
This is the context that people give money to individuals to manage – they are not only looking for institutions. So individuals can make a remarkable difference.
I see this trend popping up considerably, where institutional capital will look for PMS managers or alternative managers – something that happened in other parts of the world.
((Indemnification: Recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times)
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