Goldman Sachs veteran Prashant Khemka to start own India fund

The fund manager who set up Goldman Sachs Group Inc's India-focused equity fund in 2006 is set to start one of his own after managing money at the US bank for more than 17 years. Prashant Khemka, who oversaw $5.3 billion in emerging-market assets until his departure in April, plans to launch two long-only, absolute-return funds for investing in Indian shares. An eight-member team is being assembled and the new company, named White Oak Capital, will start operations by August, the 45-year-old said in a phone interview.

"The Indian equity market is home ground for me and it is always good to play with a home advantage," he said.

Khemka is seeking to raise money at a time when the gap between elevated Indian asset prices and anemic earnings growth has spurred brokerages including UBS Group AG to warn about unfettered optimism in Asia's fourth-largest stock market. The BSE Sensex and National Stock Exchange's Nifty50 gauges have hit record highs this year, making local shares more expensive than a benchmark of developing markets.

"Valuations have to be seen based on where we are in the cycle, and in my view the chance of above trend-line growth is higher than a chance of it falling below," Khemka said. Investors are more concerned about global uncertainties, such as the political situation in developed markets, than India-specific problems, he said.

Khemka started his career at Goldman Sachs' US equity business in 2000. He went to Mumbai six years later to set up the India business. The $2.4 billion India Equity Portfolio has returned 17.5 per cent annually over the past five years, beating 76 per cent of its peers.