Tough times are an opportunity to buy and grow the business inorganically, says Lim Hua Min, executive chairman, PhillipCapital Group, which bought a majority stake in MF Global’s India unit earlier this year. In an interview with Ashley Coutinho, he says the first priority before the group’s Indian team will be to rebuild the business that was lost due to the MF Global crisis
Can you tell us something about the PhillipCapital Group?
We started as a Singapore company in 1975 and we?ve been growing bit by bit through the years throughout Southeast Asia. We have many branches in countries like Indonesia, Thailand and Malaysia and also have a presence in Hong Kong and Tokyo. We have built quite a good network in this part of the world. We have never lost money as a group and never lost money as a Singapore entity. After the acquisition of India and Dubai business recently, PhillipCapital is now present in 16 countries. We consider ourselves as an integrated financial services firm with Asian origins but global presence.
What was the thinking behind investing in MF Global’s India unit?
At PhillipCapital, we tend to look at tough times as an opportunity to buy and grow our business inorganically. Last year, the opportunity arose when MF Global went into trouble and we were keen on investing in MF Global’s India unit. There is always a streak of optimism in us. We tend to invest in times of recession, when valuations are more justified. This gives us more opportunities to pick and choose and manoeuvre better in terms of alliances. Today, it is not easy to raise capital from the banks, but we are one of the lucky companies to have enough capital to expand our network and grow the business.
We look at the Indian investment as a very strategic investment for us because it allows us to keep moving in the direction of globalisation. First and foremost, we want to be an Asian outfit, and as an Asian outfit you cannot do without India. This year, we have bought into Turkey and Dubai. We also have a presence in London, Chicago and Paris that allows us to provide the global reach because investment today is very global, very fungible.
How will you leverage your global network for operations in India?
We are in a position where we can help clients by providing them more options in terms of investment opportunities. When we acquired this Indian business, in many ways, it was more singular in its approach; more concentrated on the derivatives and institutional side and less focussed on the retail portion. But we are all-embracing in our approach; we do not adopt the approach of ‘either-or’ but ‘and’. That means we want to cater to the institutional as well as retail clients.
In terms of product range, it’s not just derivatives or cash equities, but the whole range from fixed income and FX to mutual funds and private equity. In India, over a period of time, we would like to get into the fund management, private equity and corporate finance space as well. We will try to provide clients with a comprehensive bouquet of solutions.
Has the original MF Global Sify Securities India team been retained?
Every country we go to, we tend to give priority to the locals. All things being equal, our priority is always localisation. But we also want to inject the global mindset. The global mindset is necessary because while there may be 1.2 billion people in this country, there are 7 billion worldwide.
Can you briefly highlight your India plans for the coming year?
The first priority in front of the local management in India is to rebuild the business that was lost due to the MF Global crisis. The impact was primarily seen in the institutional side of the business; hence, there will be greater emphasis on re-establishing that franchise. At the same time, in parallel, work has started to find ways to scale the non-Institutional business by increasing the scope of the product offering and looking for scale through alliances and/or strategic partnerships.
