While money has been flowing out of emerging markets such as India, Quintin E. Primo III, CEO of Capri Capital Partners L.L.C. (No. 9 on the BE Asset Managers list with $3.53 billion in assets under management) is taking a contrarian stance and tentatively sticking the proverbial toe in the water.
To that end, the company announced that Capri Global Capital, Ltd., itsÂ international real estate investment affiliate, entered into definitive agreement to align with Money Matters Financial Services Limited, a publicly-listed India-based commercial lending institution to real estate owners and small industrial and service companies. As part of the agreement, the India-based company will be renamed Capri Global Capital Limited (CGCL) and Primo will become non-executive chairman of CGCL’s board of directors.
Primo, who is perhaps the first African American to join the board of a publicly listed company in India, says the move is a message that his firm is contemplating future investment in India. “My technical role is to preside over four board meetings a year of this publicly listed company on the Indian stock exchangesÂ and to assist them in executing their overall business strategy,” says Primo. “And they believe that Capri Capital Partners US represents an ideal model for them to follow.Â So we will help them move into the space in India over time in joint venture.”
But why India? The country is under severe economic stress. The economy is slowing and its currency, despite recent gains, remains weak. And with the US economy showing signs of recovery, money is flowing out of many emerging markets and back into the US. “This is a story that we have seen many times before and with research, with caution and with nearly a surgical knife, we move into such markets to take advantage of market conditions,” Primo asserts.
Primo says that as a country of 1.1 billion people, India has tremendous prospects for growth.Â It’s the largest democracy in the world, with an ambitious and entrepreneurial population and an abundance of intellectual capital.Â “It’s a country that we think on a secular basis will offer investors significant opportunity. So we’re using our strategic alliance with CGCL to again get our toe in the water, to continue our research efforts and together with time we will bring third party investors into the market.”
In time, Primo sees things turning around in India. But he estimates that will take from 12-24 months. “The rupee needs to stabilize. Elections need to be completed next year in the first quarter, and we need to have clear signs that there has been a correction in the economy and in the financial markets,” he says.Â “But there will be a realization that the emerging markets have been oversold and that money will begin to return to these emerging markets, and a country like India is not going away. We believe that with proper structuring, with proper controls in place, the market over the next 24 months may be quite ripe to invest.”