V Balakrishnan is no doubt a savvy investor. Two decades of financial management has definitely come in handy for the former CFO of Infosys and now chairman of Exfinity Venture Partners. When it comes to investing, keep it simple is the mantra. “Any asset allocation strategy should balance between regular return and long-term wealth creation. My idea is to have a steady stream of income,” says the former Infoscion, who quit three years back.
Bala invests in equities directly and is betting big on the India consumption story. The rationale — demand from developed markets, which drives sectors such as IT and pharma, is unlikely to recover in the near term.
Earlier, a chunk of Bala’s wealth was tied to Infosys' stock. But in recent years, he had increased the weightage to bonds as interest rates trended lower. The strategy paid off. “I had invested in certain tax-free bonds few years ago and with the softening of interest rates, they delivered a very high IRR in my portfolio. I won’t claim that I was smart enough to identify this asset class. It just happened as I was looking for safety and return, and it is incidental that it turned out to be a very good asset class,” says Bala rather modestly.
Though the 50-year-old does consult a lot of people before investing, he takes the final call. “I meet a lot of people, listen to their views and then finally come to my own conclusion. I think, it is very important for anyone to own their decision when making an investment. This helps to reflect on the decisions and become wiser in making future decisions,” he says.
Being in the IT hub, Bala is not immune to the flavour of the season — start-ups and venture funds. “I believe that the liquidity driven equity markets will take a pause at some time. When it comes to investing in equities, when you exit is more important than when you invest,” says Bala.
So it is not surprising that allocation to the alternative asset class has increased, of late. Bala points out that it is both strategic and opportunistic. “I strongly believe that the start-up ecosystem in India is going to be one of the best and biggest value creator in the coming decade, as tech will transform businesses beyond our imagination.”