Credit Suisse weighs India fund business

MUMBAI (Reuters) - Investment bank Credit Suisse (CSGN.VX), which relaunched its India brokerage earlier this year after a six-year hiatus, expects to add about 35 staff as it ramps up its wealth management and other businesses in the country over the next few months, the firm's country head said.

Credit Suisse, which is awaiting regulatory approval for its wealth management license in India, is also considering entering the fund management business, Mihir Doshi, managing director and country head, told the Reuters India Investment Summit on Friday.

"All the existing businesses want to grow next year," Doshi said, referring to a line-up that includes equity sales and trading, M&A advisory and private equity.

The firm, which like its rivals has been rapidly building up its presence in a country whose economy is growing at nearly 9 percent, employs about 94 people in its India business and expects that number to rise to 125 or 130 by March, Doshi said.

That does not count Credit Suisse's offshore operation in Pune, which opened in November 2006 and employs about 900 -- a figure it plans to increase to about 2,400 by the end of 2008.

Credit Suisse is also considering applying for a banking license in India, and may also look to offer listed derivatives, Doshi said.

"The India story is about infrastructure, it's about the consumer. These are the two biggest reasons to get excited about India," said Doshi, who is known as Mickey.

Wealth generated by an economic expansion that has averaged 8.6 percent over the past four fiscal years has driven a consumption boom. Car sales, for example, rose nearly 15 percent in October from a year earlier to nearly 106,000, and more than 8 million people signed up for a mobile phone during the month.

But transportation bottlenecks and a lack of power threaten to choke off growth, and India says it needs $500 billion in investment to upgrade its infrastructure.

The growth and investment need has spurred rivals such as UBS (UBSN.VX) and Goldman Sachs (GS.N) also to build up operations rapidly in India, spurring fierce competition for talent.

"There's enough business going around that I don't think even the smaller ones or the larger ones are any less busy," Doshi said.

"Retaining talent, I think, is by far the biggest challenge for us larger firms."

Given its late start, Credit Suisse ranked 19th this year to the end of November in Indian equity capital-raising, according to Thomson Financial. Merrill Lynch, Citigroup (C.N) and JP Morgan (JPM.N) were the top three equity issuers in the country.

Credit Suisse ranked 11th in India M&A advisory, compared with its sixth-place showing for 2006. UBS (UBSN.VX), Goldman Sachs and Morgan Stanley top the India list this year.

FUND MANAGEMENT FOCUS

Credit Suisse has fund management joint ventures in China and South Korea and is weighing its approach for that business in India, Doshi said.

"Clearly, as you build out Asia, that's a very strong desire. So we will look at it. The question really is how and when," said Doshi, who left Morgan Stanley's (MS.N) Indian joint venture in early 2006 after 22 years with the Wall Street firm to join Credit Suisse as country head for India.

Credit Suisse reopened its Indian brokerage business earlier this year after the stock market regulator suspended the bank's local unit from broking activities in 2001 for alleged violation of rules on price manipulation.

Last month, it hired Puneet Matta from Citigroup to head its wealth management business in India.

India was home to 100,000 millionaires at the end of 2006, up 21 percent from a year earlier, according to a Merrill Lynch Capgemini report.

(Reporting by Tony Munroe and Himangshu Watts; Editing by John Mair)