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Deutsche Bank fund for high net worth clients

Our Bureau

CHENNAI, Sept. 18

THE Germany-based Deutsche Bank proposes to start a venture fund for high net worth individuals, in the first quarter of next year, according to Mr U.R. Rao, Head, Personal and Private Banking, Deutsche Bank. Mr Rao said the fund was likely to start with a corpus of at least $50 million, collected from wealthy individuals who might be willing to take some risks for high rewards.

Deutsche Bank is as yet undecided about whether to float the fund under a separately formed branch office of an overseas Deutsche Bank unit, or under the existing asset management company the bank might set up.

Speaking to newspersons here, Mr Rao said the corpus may even be as much as $100 million. In fact, there is scope for the bank to pool in more money, but it would like to limit the size of the corpus, because investment opportunities are also not too man y.

The bank's confidence in being able to muster up money for the venture fund stems basically from the fact that it already has over 5,000 individual high net worth customers, whom it is advising on their private investments.

Mr Rao said that the bank was the only one in India to offer such a financial planning service comprehensively. Deutsche Bank's Relationship Managers will advise their clients not only on investment, but also on matters like insurance, asset allocation a nd even in making a will.

The bank started this service in 1998, Mr Rao said. Today, its revenues from this business is of the order of Rs 30 crores. To cater to these 5,000-odd clients, the bank has 28 Relationship Managers, working under two Investment Counsellors, in India.

The clients are typically wealthy retired persons or corporate executives or owners of small and medium business enterprises or professionals or even non-profit organisations, who may not have the time or expertise, to manage their investments themselves .

The Relationship Managers work in close liaison with the clients, understand their willingness or ability to take risks and advise them accordingly, Mr Rao said.

Now, when the venture fund is floated, the bank would be able to capitalise on this constituency of clients, although funds may come from those who are not clients of the bank.

Asked where the venture fund would invest its money, Mr Rao said that the fund would initially look at IT and media stocks, but would not be averse to investing in pharma or bio-tech stocks, if the investors so desire.

Apart from this `financial planning' service, Deutsche Bank intends to provide Estate Management and Trusts, which is basically to function as Executors of a client's estate, or a Trust. The bank expects to begin this service in the first half of next ye ar.

Operated from six locations in India, the bank is also into providing forex derivatives, real estate advisory and equity derivative services.

In the January-July period of the current financial year, the bank's revenues from its Indian operations amounted to Euro 288 million, he said.