Single family office bets on India's emerging fund managers
India's investment landscape is being reshaped by a new generation of fund managers - often spin-offs from large firms - who are challenging established players with their fresh perspectives and local expertise.
These "emerging" managers represent a critical shift in the country's evolving investment scene, according to Vishnu Amble, director and investment committee member at GreenBear Group.
GreenBear Group
“Emerging managers come from big firms where the economics were changing, or investment committees were overseas, leaving them with limited influence,” Amble told AsianInvestor.
“Now they’re establishing independent funds with local teams and have the freedom to act based on local insights and opportunities.”
The single-family investment office of a South Asian semiconductor entrepreneur, GreenBear Group was established in 2006 with offices in Miami and Singapore. The firm focuses on private market investments through fund managers, particularly emerging ones, according to Amble.
Emerging managers, also known as 'emerging GPs', are typically defined as those raising their first, second, or third institutional fund in their original fund series.
Though relatively new, these managers' ability to adapt quickly to the unique dynamics of the Indian market has given them an edge.Their success often stems from well-defined investment strategies and strong track records from their previous roles at larger firms, according to Amble.
“Emerging managers are not just capitalising on India’s growth story. They have a foundation of operational or investment experience that enables them to identify real value,” he said.
“It’s about knowing the market inside out.”
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DEVIL IS IN THE DETAILS
Despite the appeal of emerging managers, selecting the right one is far from straightforward, according to Amble
He emphasised the importance of ensuring that these managers are not simply riding the wave of India’s economic potential, but have the practical experience and market knowledge to back their ambitions.
For investors, the decision to back an emerging manager comes down to their ability to prove that they can successfully execute their strategies in a volatile market.
“You must be cautious with managers who just show up with a fund. There needs to be a compelling rationale for why they are the right people to run the fund,” Amble said.
“Do they have the right team in place? Have they successfully managed a fund before? Do they understand the local dynamics of the Indian market?”
The personal investment stake of emerging fund managers helps ensure their interests remain aligned with investors over the long term, Amble said, adding that a fund manager's ability to attract and retain talent is key to the fund's success.
“If a GP is successful but doesn’t have a strong team, they’re unlikely to continue growing in the long term,” he said. “It’s essential to see if right team dynamics and equity incentive structures are in place, to retain the best talent, before backing a GP”
For many emerging managers, attracting the right team members with the appropriate incentives is a delicate balancing act. “Investors need to look for managers who have been through multiple market cycles and understand what works. It’s not about blindly following growth trends,” said Amble.
EVOLVING MARKETS
India is well on track to become the world's third-largest economy by fiscal year 2030-31, according to S&P Global.
“We’re seeing India develop a depth and breadth to its capital markets that rivals even some of the largest global markets,” said Amble.
"From secondaries to private credit, we now have multiple liquidity avenues, and these are just expanding as more fund managers come into the market.”
The data from S&P Global also supports this trend with private credit deals in India hit record levels in 2023, reaching $7.8 billion across 108 deals, up from $5.3 billion across 77 deals in 2022. The momentum continued into 2024, with investments of $6 billion in the first half - a 22.4% increase from the same period in 2023.
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“This creates liquidity and value, attracting foreign investors across public and private markets, while a rapidly growing domestic capital base adds further liquidity. It’s an exciting time to be in India, as we witness a long journey through market cycles,” said Amble.
According to the family office executive, the private sector is driving value, at times in collaboration with the public sector.
“As private credit becomes a more integral part of the strategy, fund managers are diversifying their approaches to managing risk and driving returns,” he said.