Carlyle Group hunts for wealth assets in India alongside rivals

India generated about $590 billion in new wealth in 2023, its largest ever increase, according to a Boston Consulting Group report. Photographer: Sumit Dayal/Bloomberg

Carlyle Group Inc. is scouting for wealth assets in India that will tap into the country’s growing appetite for investing and spending, joining an increasingly competitive field.

The New-York based firm that counts PNB Housing Finance Ltd. and Yes Bank Ltd. in its India portfolio, is keen to acquire wealth and asset management companies as local households move their savings toward financial assets.

“Consumers have shifted away from seeking only mortgage loan products,” said Amit Jain, head of Carlyle’s India business. “We are spending a lot of time seeing if we can build out platforms and scale up wealth management and asset management companies.”

India generated about $590 billion in new wealth in 2023, its largest ever increase, according to a Boston Consulting Group report. The number of individuals with more than $30 million of assets is expected to grow by 50% between 2023 and 2028, per Knight Frank’s wealth report.

Global private equity firms have been snapping up targets in the booming wealth management market, where local and overseas players are fast expanding.

Blackstone Inc. acquired a majority stake in ASK Investment Managers Ltd., while Bain Capital took a minority stake in IIFL Wealth Management Ltd., now known as 360 One WAM Ltd. Asian private equity firm PAG invested in Edelweiss Wealth Management and is said to be considering selling its majority stake.

Carlyle is one of the bidders for KKR-backed Avendus Capital that is expanding its wealth business, but Mizuho Financial Group Inc. is the frontrunner, Bloomberg News reported.

With $8 billion deployed in India in its 25 years history in the country, Carlyle expects to write bigger checks as it looks to take majority stakes in companies, and build platforms to consolidate businesses, Jain said.

“Our franchise is really on a momentum that we want to build upon,” said Jain, who joined from Blackstone in 2021. The local portfolio includes technology services firms, consumer-focused companies and those involved in advanced manufacturing.

Carlyle’s India office has over 20 private equity investment staff, and is one of the largest such teams for the firm outside the US.

Besides ramping up in financial services, the investment firm is also considering backing companies that target discretionary consumption, Jain said.

“The incremental hundred dollars gets spent on more discretionary things as consumers move from mass unbranded consumption to branded, organized players that offer a better product or a better service,” Jain said, adding that the shift opens up opportunities in luxury, travel, education and healthcare.