Wanted: Indians With Pots Of Money

They are a discreet bunch and dont publicise their activities. For obvious reasons they wont admit that the hunt for Indian clients is on. But nearly all have India desks and investment advisers who are chasing Indians both NRIs and others energetically.

This is the rarefied world of private banking. Miles away from London, these bankers ply their trade in offices tucked away in the smartest parts of town like Mayfair or Belgravia. I lunched at one of these recently. It was an elegant townhouse in Londons Mayfair district. Deep leather sofas and a butler in a tailcoat who brought in wine on a silver salver. Lunch for three came with damask tablecloths, silver cutlery and a view onto a well manicured garden. This certainly isnt over-the-counter banking.

 

It may seem surprising but all the top international banks have private banking divisions. Earlier this year, Merrill Lynch threw a glittering cocktail party in the Chinese Room of the British Museum. There amidst the antiques and artifacts, many of the guests were British Indians whove been growing steadily wealthier over the years. One Merrill Lynch banker admitted later: It was mainly a private banking do.

Other banks are also spending big to drum up business. In September, Kleinwort Benson sponsored a seminar on South Asian entrepreneurship. Amongst the participants were top NRIs like Lord Meghnad Desai, Baroness Shreela Flather and food magnate, G K Noon. Along the way, Kleinwort Benson did make a discreet pitch for new business.

The banks admit they are courting NRIs assiduously. But they turn cagey when asked about whether Indians (living in India) are on the client list. However, everyone acknowledges that the really big money is in India.

How does private banking work? For adventurous clients the banks will put together high risk portfolios and for the timid it will buy bonds and other safe instruments. One Continental bank offers what it calls an income portfolio for the cautious investor. Its aim is listed as capital preservation and nearly 60 per cent of the money goes into US bonds. The remainder is thrown into a mix of the UK, German, French and Japanese bonds. Says the bank: We must present customers with made-to-measure investment concepts. At the other end of the spectrum, there are high-risk strategies for savvy investors who want their money to work hard. One bank calls this a growth strategy. There arent any fixed rules but a growth portfolio usually involves buying equities from around the world. It suggests that for a growth portfolio it might put 40 per cent of its clients cash into US stocks. Another 10 per cent is likely to go into Swiss and 5 per cent each into UK, German and Japanese stocks. The

rest is kept in cash and bonds.

Of course, it isnt as simple as that. In todays world, private bankers also offer a slick range of choices. The more adventurous who are ready for a roller-coaster ride can buy derivatives and financial futures. Others can start trusts in Guernsey or Liechtenstein. However, precious metals like gold and silver arent strongly recommended in this day and age.

How much does it need to get your own private banker? That varies from one bank to another. But $500,000 is one figure often tossed about. Most bankers admit, however, that there arent any hard and fast rules on these subjects.

And what are Indians like as clients? One Indian banker who has stopped dealing with his own countrymen grouses about his ex-clients. They are always grumbling about charges and they want all kinds of extra services.

How many Indian businessmen have hired European private bank-ers to look after their money? That is a question that will, for a long time, remain in the realm of speculation.