“Are you from a business family?”

That’s the first question that Gaurav Saria, founder of Infinitea, a chain of tea rooms that sources its tea from Saria’s estates in Assam and Darjeeling, asks wealth managers when they come enquiring about his money. Incidentally, it was also the very first question he asked The Ken before sitting down for a chat.

“My logic is simple. If you are from a business family, you understand money, otherwise you don’t,” he said. 

That’s why references—of past clients and successes—are the holy grail for wealth managers in the Northeast. They help convince headstrong clients to trust the person asking them to part with their money.

Over the last few years, there’s been a huge financialisation drive in the Northeast, said Pallav Bagaria, director of Sapient Finserv, a financial-services provider working in Guwahati. 

Post GST, business people have started moving their cash holdings into banks—and are now looking for ways to invest this money. Wealth managers, too, have exhausted their search for the uber-rich in the smaller towns of the West, South, and North, and are making a beeline for a region that tends to be a footnote to business plans, including in financial services.

Together, this has led to a rise in sophisticated products such as alternative investment funds (AIFs) and portfolio-management services (PMS). 

“Two years back, AIFs and PMS made up less than 5% of our assets under management (AUM) in the region. That has now gone up to 25–30%, also because of mark-to-market,” said Bagaria. With an AUM of Rs 4,500 crore in the Northeast, Sapient is, by far, the largest player among the 30 or so wealth-management firms with sizeable operations there. 

The reason for this rise is a combination of clients craving sectoral differentiation in their portfolios and certain products and asset classes not being available or suitable to be on the mutual-fund platform, Bagaria added. 

That said, Northeastern HNIsPeople with a minimum investment capacity of Rs 1 crore are a tough lot to crack, according to a dozen wealth managers The Ken spoke to from the region.