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Not a great image to be honest. 

My group (ignore my title, its out of date) is FO at a BB, and has a back office support team in India. Generally speaking their communication skills and problem solving skills are not great. They try to make up for lack of understanding with sheer hours at the desk. Someone from that office would have a stiff uphill battle to get to a FO group in the US/UK at my bank. 

I am absolutely NOT saying there is a bias against Indians ethnically. They are well represented in FO roles at my bank and crushing it. Every bit as respected as other ethnicities. 

The bias/bad image is specifically attached to corporate culture in India if that makes sense. Those who can get out for school, a job, etc do absolutely fine. 

Hope that makes sense, felt kinda racist to type out, wasn't intended to be. 

 

India and SE Asia are huge growth markets for some of the BBs. The demographic tailwinds, GDP growth and digitization trends are going to bring a lot of unicorns in the next decade.

Some of the BBs have been active in India since the '90s. CS is one of them.

Unfortunately, the banks don't make much on IPOs (as there is a standard fee), and the international banks have to compete with the large local IBs. But, they do make decent spread on private capital raises and other advisory work (from what I understand).

From an equities perspective, if you take a look at India last year, it was one of the best performing markets.

There are certainly still a lot of issues/challenges with India. The infrastructure is absolutely terrible when comparing to other Asian emerging markets (China, Vietnam, Indonesia, etc.). The disparity between the rich and the poor is extreme, meaning there is quite a small middle class, relative to size of the population. The drop off in HHI is quite steep after the top 50m people. It's an import-heavy country. there is a LOT of cronyism and corruption. The government has also been very anti-China due to the border rift, which has limited foreign investment into the country.

The tech ecosystem is incredible, and is probably the most exciting tech ecosystem (outside of the US) in the next decade. MF PEs and VCs have all stated India will be the next large opportunity in the next 10 years (Henry Kravis/Steve Schwarzman, etc. Have all said this) It's very similar to where China was in 2011, from a GDP per Capita PPP-adjusted basis.

Corporate governance has historically been viewed to be shit in India. Lots of shady dealings in many of the listed companies, but many overseas Indians are seeing the massive opportunity in India and are increasingly moving back to India. This new generation of entrepreneurs and professionals have worked in Western companies (banking, consulting, Big4, Fortune500, tech, etc.) and is gradually changing the standard of business dealings by raising the level of professionalism and adhering/honoring legal commitments/agreements. Most of these guys are more ethical in their dealings (of course there are still bad apples).

India has it's fair share of challenges, but is one of the most exciting growth stories in the coming decade.

 

Let me add this though.

Back office moving to FO is an extremely tough move for anybody. This has nothing to do with the image of India, or whether you are Indian. You can be 6'1" blond hair blue-eyed and white, and it would still require a herculean effort and enormous luck to make that transition. 

Don't attribute it to India. It has nothing to do with that at all. 

 

Hi, what you wrote above was a great read, especially the part about many people coming back with overseas experience(seen a lot of talk about betting on India).Are you indian by any chance? also what is your view on the future of Investment Banking and finance in general in India?

 

I don't know if you are referring to me or OP.

But, I think finance has a great future in India. My experience/expertise is in the private markets, so keep that in mind when reading my opinion. From a public markets perspective, I think there are still a lot of opportunities. From an asset allocation perspective, institutional investors still think of India as another "allocation" in emerging markets. It hasn't yet risen to the point of having its own "story", like China has in the past 20 years. But, maybe, it will get there. 

India's disadvantage is the fact that many international investors have gotten burnt in India in the past 20-30 years. When you get burned in emerging markets, it tends to stick many times more than when the same happens in developed markets. If you invest in a fraud in developed markets, you don't blame the country. You might blame yourself, your team, or your luck. But, when someone gets burned in emerging markets, there is a natural tendency to blame the entire market, culture or the country. India has always been THE next growth story. But, the fact is that in the past 30 years....India underperformed in comparison to China. This due to many factors/reasons (which I am not going to get into on this post). If you cover Indian equities and have a good understanding of India, there are many hedge funds that will hire you in Asia. Lots of Asia L/Os and HFs trade India, so I believe there is always demand for Indian or Asian emerging markets specialists. That being said, of course >90% of the people who cover India are Indian. I don't think you need to be an Indian to understand India, but you do have to genuinely like India as a country and embrace it as a culture, in order to have the curiosity to understand South Asian economic and social dynamics.

The private side is much interesting, in my opinion (again, very biased). This applies to PE/VC. I think there is so much oopportunity across private equity, venture and private credit (don't know about real estate). VC is very competitive at the early stage (especially Seed/Series A). I find it to be less competitive in the PE space, but if you follow the news or look at data, the non-local PEs (whether regional or global MFs) are increasing their deployment in India. There are still large gaps in the economy, which presents investment opportunities for private investors. If you like private investing and are willing to work hard, private investing in India is a great place to be (assuming you work at a Tier I/II firm).

Investment banking will continue to be around, whether India thrives or fails. I think the growth opportunities in India are unbelievable, but competition is also very high. Lots of incredibly smart and hardworking people. There will always be someone hungrier or smarter than you. But, you can differentiate with emotional intelligence (EQ), social skills, composure and soft skills (in general). I would say (similar to China) definitely don't compete on hard skills or technicals. Dozens of dudes will outperform you. But, be approachable, sociable, likeable. Be presentable and have confidence. Understand that business/investing is still very relationship-driven, and see the bigger picture. Be a good communicator. Be likeable. That's how you differentiate.

No, I am not Indian. But, I know India quite well.

 

Wow, that was a really amazing write up.Thank you for such a detailed response, i really appreciate it. I'm actually Indian and was thinking about building a career in india because i love it here, things have gotten really good over the last few years especially in bombay.i'm not particularly interested in public markets as of right now but VC in general really interests me and in obviously a huge market in India, but as you said a lot of funds have underperformed and returns have been subpar except for the top quartile funds who have killed it.

A found this article a few days ago: https://ajuniorvc.com/explainers/long-india/

If you have the time do read it, and once again thank you for your response.

 

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