Date: 12th July 2022 | Publication: Ausbiz
A contrarian way to beef up yout emerging market exposure
India Investment Management’s Mugunthan Siva discusses the outlook for the Indian economy and equity markets. Having been a popular destination for foreign capital inflows in 2021, appetite has cooled substantially this year as a rampant US dollar strength and aggressive monetary policy tightening sparked renewed outflows. However, despite the challenges posed by higher energy costs, geopolitical risks and other headwinds, Mugunthan doesn’t believe sentiment will remain this weak forever. “India will become a popular bet again for foreign investors who have exited over the past 12 months on rising inflation and oil price,” he says, adding that outflows over this period now amount to over US$40 billion. He says if these trends start to reverse with the global economy avoiding the risk of a hard landing, then India is primed to deliver strong performance over the longer-term. Mugunthan says there’s also a contrarian view underpinning his thesis, nothing that emerging Market fund managers have reduced their exposure to India from overweight to underweight for the first time in over a decade.
India Avenue is a boutique investment management firm providing investment solutions that allow our clients to benefit from India’s remarkable growth story.
The journey towards the “birth” of India Avenue originated in 2005, when ING Investment Management started a business in India as a separate division, utilising a practiced multi-manager philosophy in markets like Australia, and exported it to India. Three of our founders, Mugunthan Siva, Rajeev Thakkar and Sajjan Raut Desai worked together for INGIM (India), building investment strategies and structures, under this philosophy and applying them to Indian capital markets
In 2011 our founders started discussing the possibility of building an investment firm with a capability to provide a focus on India as an stand-alone investment jurisdiction for foreign investors. The founders identified Australia and New Zealand as nascent markets for investing in regional locations, with the potential to accelerate given education and insights which the firm could provide.
By 2015 the group of founders decided to work full-time on this concept to bring it to life. They did this by leaving their existing employment, thus exercising high conviction in the investment region of India as a long-term structural story for investors in Australia and New Zealand. Thus, the firm India Avenue Investment Management was registered and came to life in 2015 in Sydney, Australia.
After building our business for a period of 12 months, our first fund, The India Avenue Equity Fund was launched on 6th September 2016, with strong service provider partners like Equity Trustees (RE), Mainstream (Fund Administrator), KPMG (Fund Auditor) and BNP India (Custodian).
India Avenue is now a boutique investment business firm, with clients spread across family offices, high net worth individuals, wealth advisers and financial planning firms. Our firm has focused on education and knowledge as a driver of investment behaviour and have taken a long-term approach towards Australian and New Zealand investors contemplating an allocation to India’s growth as part of their portfolios. Our firm has assets in excess of A$50m and the India Avenue Equity Fund is rated “Recommended”* by Lonsec and is available on multiple investment platforms across Australia and New Zealand.