Sharat Shroff, manager of Matthews Pacific Tiger Fund, on the appeals of India.
Sharat Shroff joined Matthews in 2005 and has been on the management team of Silver-rated Matthews Pacific Tiger Fund
1. What was your first investment?
2. What’s your favorite aspect of investing?
The act of investing is intellectually stimulating and offers an opportunity to engage with entrepreneurs and business builders. At the same time, success and failure are fairly transparent in investing.
3. As of the last portfolio date of Matthews Pacific Tiger, you had 21% of assets in India, which is nearly twice the amount of the average Pacific/Asia ex-Japan fund. What’s attracted you to India?
Investing in Indian businesses offers the potential to get dual benefits of growth and diversification for investors’ portfolios, although investors need to have reasonable time horizons.
4. In which sectors in India are you finding the most value?
As long-term investors in the country, we believe there are high-quality businesses in sectors like consumer, financial services, healthcare services, and information technology.
5. What makes India a good place in which to invest?
We have always been attracted to the management talent in India and their ability to harness the economic tailwinds and build long-term businesses. It further helps that there are productivity gains that can be extracted with some help from structural reforms.
6. What are the biggest India-specific risks?
Inadequate time horizon is one of the biggest challenges facing investors that are considering India-related investments.
7. Can India surpass China in terms of growth?
As China’s size grows, it is natural to expect the pace of expansion to moderate, and for India’s to sustain. However, India still has a lot of catching up to do in other aspects of economic development like creating sufficient employment opportunities.