AMC Speak All set for a new innings in India Luis Valdes, President – Principal International
Principal Group is all geared up for a new innings in India, post its acquisition of PNB’s stake in its mutual fund venture. This acquisition is one among a series of acquisitions in multiple markets across the world, as it seeks to aggressively expand its global franchise and deliver its widely respected investment solutions to investors across the globe. Luis Valdes – the head of Principal’s international business – takes us through Principal Group’s global expansion forays and its plans for scaling up its Indian mutual fund business.
WF: What are some of the significant milestones in recent times in Principal Group’s long and illustrious journey?
Luis Valdes: Principal was founded in 1879 as an insurance company. Today, we’re a member of the FORTUNE 500 and a global investment management leader with more than 14,000 employees around the world. We serve 22 million customers and manage $655.5 billion in total assets as we help people and companies around the world to build, protect and advance their financial well-being with our retirement, insurance and asset management expertise.
Some key milestones include:
WF: Principal group has been aggressively buying more stakes in the existing markets while investing and expanding in other markets like the CIMB deal - Malaysia, Mexico, and Hong-Kong among other markets. What is the thought behind buying out PNB’s stake in your Indian MF business and in what ways might this influence your business going forward?
Luis Valdes: It is an exciting time for Principal as we continue to grow our global operations to reach more individuals, businesses and institutions with our long-term savings and investment products. Our mission within Principal International is to help millions of middle class citizens in the emerging markets in which we do business to plan and invest for their financial security through our retirement and long-term savings franchise.
Principal has been in India since 1999 and has been assuming increased ownership in its joint venture relationship with PNB over time as part of our strategic growth plan in one of the most important markets in the world, the latter is a normal strategic realignment process in which each institution will stay more focused in their core business. We retain a strong business relationship with PNB and will continue having them as an important distributor of our long term saving solutions in India.
We know with India’s large emerging middle class there will a growing need for long-term saving and investment products. Now, with full ownership of our asset management business, we are focused on applying our global expertise as an investment manager to our clients in order to generate the performance and service they should demand of us. This will enable us to bring long-term savings and investment solutions to retail and institutional clients in India through advisor and digital channels.
WF: There is a general belief in the market that Principal’s business in India has historically perhaps not done full justice to its global stature and that it’s only recently that we are seeing vibrancy in its Indian business. How would you react to this perception?
Luis Valdes: Principal does business in more than 70 countries around the world. When we invest in a market, it is for the long-term outlook of that country and we see positive opportunities in India. Each year our business has further matured and we have continued to make progress. With India’s large emerging middle class and growing need for long-term saving and investment products, we are confident this growth will sustain.
We view India as a long-term opportunity for Principal. We have the tools, capabilities and resources to add value to the marketplace and recognize long term growth as a result. We can leverage Principal global investment management best practices, global product development expertise and global distribution networks.
For example, Principal is uniquely suited to:
WF: What are your business plans for Principal in India over the next 3 years? In what ways will your Indian business be different 3 years from now?
Luis Valdes: Looking ahead, we see opportunity to further innovate in digital tools and infrastructure to support our advisors in serving their clients, in addition to providing these digital tools to consumers to better understand and access their accounts.
We can leverage Principal global investment management best practices, global product development expertise and global distribution networks. For example, Principal is uniquely suited to:
WF: What are the big global trends in financial products intermediation? To what extent do you see these trends playing out in India? What are the key intermediation trends you see playing out in India?
Luis Valdes: Global trends include:
We see similar trends in India.
Principal PNB Asset Management Company Private Limited (PPAMC) offers only the units of the schemes of Principal Mutual Fund, a mutual fund registered with SEBI.
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