Blackstone to get access to ASK’S pool of HNI clients, domestic debt market

Us-based fund manager Blackstone’s buying into ASK Group is expected to give it access to a strong network of domestic high net worth individuals and family offices of the latter, according to senior executives in investment banking and fund management firms.

Blackstone has bought 74 per cent in Advent International-backed ASK Group for about ~7,400 crore, reports said on Wednesday.

“All these days Blackstone was raising only global funds. Now it can tap domestic investors. Foreign capital comes with a currency risk. When you buy core assets, you can’t have a currency risk,” said a managing director of an international investment banking firm.

Blackstone is the biggest owner of office properties in the country and invested over $7 billion in these assets since 2011.

The investment banker quoted earlier added that since the stock markets were booming and a lot of domestic HNI money was getting into mutual funds and stocks, Blackstone could tap that.

“I feel Brookfield will do similar things in future,” he said.

Mumbai-based ASK Group has wealth management and multi-family office service under the name ASK Wealth Advisors; portfolio management services under ASK Investment Managers, real estate fund management called ASK Property Investment Advisors, and private equity management ASK Pravi Capital Advisors.

ASK is present in 20 locations in India, Singapore, and Dubai, and has clients in Asia, Africa, and Europe. The group managed assets of ~71,500 crore as of June end, including portfolios of HNIS.

Blackstone declined to comment on the subject.

Many in financial markets say Blackstone buying into ASK would give it entry into the Indian debt market.

“ASK has considerable positions in Indian real estate debt and this helps Blackstone in inorganic growth,” Saurabh Shatdal, managing director, capital markets, Cushman & Wakefield, adding that buying into ASK would help Blackstone gain a strong foothold in the wealth management business in the country, which has seen a double-digit compound annual growth rate over the past few years.

He cited the example of how in March this year, Asiafocused investment firm PAG bought 61.5 per cent in Edelweiss Wealth Management for ~2,366 crore.

Amit Goenka, managing director of Mumbai-based fund manager Nisus Finance, said if Blackstone wanted to get lending to businesses, it needed a domestic manager and domestic licence held and owned by an Indian entity.

“If you have to avoid taxes as foreign investor, the rule is that you should be 50 per cent owned, managed, and controlled by a domestic entity,” he said, adding that ASK had experience in managing domestic money for years and fitted the bill.

Ramashraya Yadav, chief executive at Integrow Asset Management, said that besides giving access to a domestic pool of investors, the buy would give Blackstone a strategic entry into the residential property market.

“So far, it was there in mostly commercial property markets. The timing is great as the uptick of residential markets has started,” he said.

However, a senior executive at a wealth management and finance firm said Blackstone was buying it as a financial investment and a plan of exiting the business at some point in time with good returns.

Daniel GM, founder-director at industry-tracker PMS Bazaar, said such a deal would strengthen confidence in the Indian asset management space, and would have a rubon effect on other players.

“ASK is one of the most respected portfolio managers in the country and recently added more institutional money to be the top portfolio manager in the country in terms of AUM. This deal increases the market valuation of similar (investment) managers in the country,” he said.