Jefferies plans India mutual fund foray, joining global giants

Jefferies Financial Group Inc. is gearing up to enter India’s $900 billion asset-management industry, according to people familiar with the matter, joining a growing list of global financial giants seeking to tap one of the world’s fastest-growing major economies.

The New York-based firm has signed up Milind Barve, former head of HDFC Asset Management Co., as an adviser to shape its strategy and steer regulatory approvals, the people said, asking not to be identified as the information is private.

India’s mutual fund industry has seen explosive growth since the pandemic as households once wedded to gold and real estate embrace financial assets. Total assets have more than doubled during the past five years, with inflows through monthly recurring equity plans averaging about $3 billion since April.

A Jefferies spokesperson declined to comment, and Barve didn’t immediately respond to requests for comment.

The firm will face stiff competition from established fund houses backed by major lenders including HDFC Bank, ICICI Bank, and State Bank of India, whose distribution networks span the entire country.

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It will also contend with global peers like BlackRock Inc., which has returned to India after a seven-year hiatus. The world’s largest money manager recently launched actively managed funds in partnership with billionaire Mukesh Ambani’s Jio Financial Services Ltd. No less formidable are fintech rivals such as Groww and Zerodha, which are challenging traditional players’ dominance.

India’s stock market value has more than doubled to $5.1 trillion over the past five years, underpinned by strong participation from millions of retail investors.

That faith has endured despite Indian equities lagging emerging-market peers over the past year and foreign investors pulling back due to tepid earnings growth and stretched valuations. Still, a sharp correction could test the enthusiasm of domestic investors.

Globally, Jefferies is riding a rebound in dealmaking and money management. The firm posted record revenue of $2.05 billion in the September quarter, up 22% from a year earlier. Net revenue from asset management nearly tripled on stronger fund performance, underscoring its growing ambitions in the space.