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AJ Capital ready for the next phase
PRIVATE equity, tick. Public securities, tick. Incubating and running operating businesses, tick. In just over a decade since its establishment in Singapore, AJ Capital, the family office run by Abhinav Jhunjhunwala, a scion of one of India's wealthiest families, has been there, done that. Now the firm is ready for the next phase - to manage third party capital.
Having secured its Registered Fund Management Company license (RFMC) last year, the firm has started to open up its multi-strategy public markets fund to other family offices. Says the CEO: "We started out managing proprietary capital. We've been fortunate our (public securities) returns have been quite decent over the last several years, on average between 10 and 12 per cent in USD. Given this interest it makes sense to open this up to other families.
"We've reached a stage where our historical performance is good enough, and infrastructure is broad enough that we believe we can support the needs of others like us. The idea is to start conservatively so we went for the RFMC license, which would give us the opportunity to demonstrate what we can do without large amounts of risk."
The RFMC license allows a firm to manage up to S$250 million in assets and is limited to up to 30 accredited or institutional investors.
Mr Jhunjhunwala is the son of Amitabh Jhunjhunwala, former vice-chairman of India- based Reliance Capital and widely regarded as the right-hand man of tycoon Anil Ambani. The younger Mr Jhunjhunwala, 35, graduated from the University of California, Berkeley, with a Bachelor's degree in genetics, and went on to obtain a Master's degree in Business Administration from the University of Chicago Booth School of Business.
After graduation, he cut his teeth in investing at Deutsche Bank on the structured credit sales desk just prior to the global financial crisis. In 2008, he joined hedge fund firm Valiant Capital Management, where Valiant principal Christopher Hansen's investment approach made a lasting impression.
Unlike most family offices which focus mainly on public and private markets, Mr Jhunjhunwala has also taken the route of incubating businesses himself in the areas of insurance, healthcare and education. The businesses have a total staff strength of around 270. The education business - the Little Paddington chain of preschools - is run by his wife Prerna Sarda, daughter of Kolkata jute baron Ghanshyam Sarda.
IN HIS operating businesses, he has assembled a team of experts despite not being an insurance or healthcare professional himself. The insurance business Symbo Platform Holdings, for instance, seeks to differentiate itself with a digital platform offering innovative and "context based" policies. Symbo was incorporated in Singapore in 2017 and has a presence in India and Singapore. India was Symbo's fi rst market, where the firm has built an agent network of over 25,000 micro entrepreneurs who tap Symbo technology to sell insurance across the country. The India affiliate Symbo India Insurance Broking has launched context-based policies such as insurance for marathons, breast and cervical cancer. It sells 100,000 such policies in India a month.
Venture firms Insignia Ventures and Dymon Asia Ventures were early investors in Symbo. The company has closed its series A funding and expects to make an announcement in the first quarter.
"I'm a finance guy. I've always been a banker or investor. I believe a successful insurance or healthcare business has to be built by people who are from the industry with the requisite experience. It's not just about addressing consumers with pain points.
"We started to recruit fairly senior folks to lead the businesses, provided them with equity and we've given them real responsibilities. That's why we've come relatively far in a short amount of time. Our people are great leaders; I learn a lot when I see them operating the businesses. We have an overall culture of collaboration and inclusiveness and a fairly lateral structure - all of which is helping us grow more rapidly."
He is keenly aware of the consumer pain points in insurance. "To solve the problems, you need people who understand the dynamics. Insurance has so much regulation and things people need to be aware of. Consumer pain doesn't end with selecting a policy. Most of the pain arises when you have to make a claim, because usually there is some exclusion or reason they can't get the benefit they thought they were entitled to, and their financial plans go out the door. We built a lot of post-sale capability ...
"We believe that structurally, insurance and healthcare are areas where the region has tremendous needs. People are under-served, under-covered from the insurance perspective, and lifestyle diseases are on the rise. The question is how to get the services to the people."
AJ CAPITAL'S healthcare business is called Vivant, a healthtech-driven firm which generates revenue by licensing a suite of products to business clients in India and more recently to other markets in Asean including Malaysia and Singapore. Its products include digital health risk assessment, electronic health records, doctor chat and condition management programmes for weight loss, hypertension and diabetes, among others. Vivant also works with corporates and insurers to help them engage on wellness and health. Vivant's roots lie in a healthtech startup called Symple Wellness, established by AJ Capital. In 2018, Symple acquired Punebased AllizHealth, a wellness and health analytics platform. The merger was subsequently rebranded as Vivant, held under a holding company, the Symple Wellness Platform.
Mr Jhunjhunwala has sought to inject impact into the Symbo and Vivant businesses. Vivant, for instance, launched a women's health app called Nyra which helps to track a woman's menstrual and ovulation cycles, among others. Users may also chat with doctors in real time. The app is free and has so far been downloaded over 500,000 times and logged 10,000 doctor chats a month.
"We've seen tremendous uptake; it's available in Hindi, English, and Bahasa. We don't have a monetisation view on this. It was something we could put together very quickly with genuine impact. A lady recently reached out to one of our doctors. She said - using your advice and app I was able to conceive ... In the future there may be some commercial angle but the core offering will always be free; there is no alternative in the market today."
SYMBO'S impact lies in its ability to enhance the livelihood of its network of agents in rural areas of India. "We empower agents with our app. Essentially you can be a small shop owner, and you could raise your income by 10 to 20 per cent as an insurance sales person. For someone who makes US$200 a month, with this app if they make US$20 or US$50 more, that's a substantial change."
He believes that the businesses have gained traction due to a "high degree of alignment" internally. "The organisational thinking is gelling. People speak the same language, and in terms of the path forward there is clarity of thought. We do that by employing frameworks where there is a healthy blend of inputs from relevant operational team members, in setting goals for the period. The key results are set by people responsible for driving traction. That degree of accountability and contribution to the outcome is something we're very happy with."
A fairly fl at internal structure is key. "There is a great deal of collaboration between the groups and team heads, and no notion of hierarchy ... We've never had the appetite - and I personally - for a hierarchical structure. I never enjoyed it when I was low on the totem pole, so I can't imagine that it's fun for anyone else." W