Rashesh Shah turns to his wealth management team for advice when it comes to his investments. That’s probably one of the many advantages he has by virtue of having promoted Edelweiss Financial Services. “I pay them a fee and they in turn invest my money in equities. In that sense, I am their client,” says Shah. Edelweiss, a company that he promoted in 1996, today controls 40 businesses. To date, Shah’s most preferred asset class is equities. “If you have a long-term view (at least three years in his lexicon), it is clearly the best bet,” he explains. When Shah founded his company almost two decades ago, all his investments were in Edelweiss stock. “I borrowed money and invested — you could say — nearly 130% of my money in it. Edelweiss has been my best investment to date.”
Shah is a little reticent about how much of his wealth is outside Edelweiss.” His stake in the listed Edelweiss Financial Services is over ₹840 crore today; this is at a market capitalisation of ₹4,700 crore and with Shah’s holding being 17.91%, which does not include what the rest of the family holds. This is the holding company for the group, which has subsidiaries in insurance, housing finance and asset management. “My thumb rule for return in equities is that it should deliver a post-tax return of at least 14-15%. Investors need to understand that this is a volatile asset class and you will be rewarded for time at some point,” Shah says.
Asset classes like real estate also do make sense to him, and Shah is quick to say that one should own at least one home. “I have invested some money in art as well and these are consuming assets. I do not believe in investing in land since it is illiquid,” he adds. He believes that one should start saving early, and then invest early. To him, the parameters for investing in an asset class are governed by what the long-term expected returns are. Much of these astute observations come from the inherent advantage of having spent some serious time in the financial services business. “I guess you could say that,” signs off Shah with a smile.