Investors prefer realty market over MFs for quick buck

23 Aug, 2010, 06.31AM IST, Sugata Ghosh

The rich rarely admit when they lose money. Often it’s too little to matter. More often, they are too proud to tell the world how wrong they were. A client who asks a private wealth manager to handle Rs 50 lakh, may change her banker if the man fails. But she is unlikely to write a letter to the editor, or drop a mail to regulators — things that angry mutual fund investors often do. Better known as HNIs, these investors fish for ‘sophisticated’ products that appear smarter than stocks or bonds.

Over the last four years, more and more of them have been drawn to properties. They don’t get into cash deals, broker-dealings and paper work — the messy side of real estate transactions. Instead, they ask real estate fund managers to grow their money. Their message to fund managers is simple: “first, don’t buy listed stocks, go for unlisted builders; second, pick those property firms with projects in Mumbai and Delhi, the hottest markets.” Around 15 local real estate funds are today managing Rs 10,000-12,000 crore. That’s as big as the portfolio management business of stock brokers. Read more

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