Kotak Wealth Management

About

Kotak Mahindra Bank Ltd is an Indian banking and financial services group composed of 19 subsidiaries. The financial services of the bank have a reach across 1600 cities in India with international operations in Singapore, London, the USA, and the Middle East. 

Advisory and asset management services were introduced by Kotak Mahindra Bank Ltd in 2008.Wealth management services are undertaken by its fully owned subsidiary Kotak Investment Advisors Ltd. (KIAL). The wealth management business segments are defined as wealth management and family office. Within the family office is Kotak Mahindra Trusteeship Services which offers estate planning services.

As of March 2020, Kotak Mahindra Bank has more than 71,000 employees. According to Asian Private Banker ,total assets under management is $38.6 billion with 122 relationship managers in 2019.  

They offer their wealth management services to UHNI and HNI.

Kotak Investment Advisor Ltd. (KIAL) is a licensed Registered Investment Advisor with the Securities and Exchange Board of India (SEBI). 

Key staff

Srikanth Subramanian- CEO, Private Wealth Investment Advisory, Kotak Investment Advisors Ltd ( October 2020 to present). Srikanth has 20 years of professional experience and an MBA from SVKM’s Narsee Monjee Institute of Management Studies (NMIMS). LinkedIn

Nishant Kumar- Head Investment Advisory, Kotak Investment Advisors Ltd ( October 2019 to present). Nishant has over 16 years of experience. He has an MBA from Narsee Monjee Institute of Management Studies (NMIMS) LinkedIn

Services

  • Investment services-  Kotak Investment Advisors offer bespoke advisory services in equities, fixed income and alternative investment funds. Their offerings include both proprietary and external wealth products.
  • Wealth planning – their family office offers services with a scope significantly broader than pure investment advisory. Trust and estate planning is provided by Kotak Mahindra Trusteeship Services Ltd which is within the family office.
  • Lending- cash management and lending

Investment Philosophy (for firm)

The wealth management process is described as involving a combination of the art and science of investing by a team of dedicated product and service domain experts. The investment process is presented as being all encompassing for both short term opportunities and long term strategic positioning tailored to the unique requirement of each client. 

From media interviews with Srikanth Subramainian, CEO Private Wealth Advisory, we have been able to identify aspects of the Kotak Wealth Management’s investment philosophy. In an Economic Times article, dated 15th December 2020, Srikanth emphasizes the importance of patience in formulating and implementing an investment strategy especially for fixed income securities. Likewise in a Moneycontrol media interview dated 29th October 2020, Srikanth explains Kotak’s consideration of Environmental Social and Governance (ESG) factors in addition to shareholder wealth maximization in the assessment of investments for clients. 

Media

HNIs looking at unlisted space, alternative asset classes, Economic Times, 15th Dec 2020

https://economictimes.indiatimes.com/markets/expert-view/hnis-looking-at-unlisted-space-alternative-asset-classes/articleshow/79721426.cms

Srikanth Subramainian shares the top-down approach of Kotak Investment Advisory in making tactical market calls related to equities and fixed income. In terms of the market as a whole, he shares the caution with which KIAL is navigating the uncharted territory of the pandemic, through an unwavering neutral stance in equities and a limited sectoral bias. Srikanth highlights the growing interest of HNIs in alternative asset classes (real estate REITs) and tech startups in the Indian unlisted space.

Rise of ESG investing, Moneycontrol, 29th October 2020

Srikanth Subramainian highlights the incorporation of Environment Social and Governance (ESG) factors in assessing investments towards enabling investors across wealth segments and categories to target returns with a conscience. He explains that Kotak Wealth Management prioritizes risk adjusted returns as opposed to the mere consideration of the magnitude of returns.

Banks move towards advisory for HNIs, distribution for retail, Mint, 8th September 2020

https://www.livemint.com/money/personal-finance/banks-move-towards-advisory-for-hnis-distribution-for-retail-11599581938639.html

The Securities and Exchange Board of India’s (SEBI) regulation of investment advisers is seen to cause banks like Kotak Mahindra Ltd to segregate advisory and distribution services by client categories. Effective October 2020 RIAs are not permitted to offer both advisory and distribution services to the same client. The Kotak Mahindra Group began offering advisory services in 2008 through the flagship bank, however the service was moved to a subsidiary, Kotak Investment Advisors Ltd in 2019. Overall, the regulation has resulted in advisory services being offered to wealthy clients (HNIs) with distribution services focused on retail investors.

Analyst questions

  1. What is your investment philosophy?  Has it been constant over time or have you had reason to modify it at any point?
  2. How do you segment your target clients? Have you noticed differentiated needs across your client segments?
  3. What processes do you use to weigh Environmental Social and Governance (ESG) factors in investments? Can you walk us through your methodology?

Prepared by – Adza Vajime

Date – 6th March 2021

Peer reviewed by – Chaitanya

Date- 7th March 2021

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