“Javier Milei Has Made All the Right Noises,” Says Aarna Holdings’ Ameya Prabhu

Prabhu, who also heads the Indian Chamber of Commerce, spoke to Bloomberg Línea about his partnership with Grupo Werthein to invest in Latin America

Ameya Prabhu (derecha) visita al primer ministro de la India, Narendra Modi
June 06, 2024 | 08:52 AM

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Buenos Aires — Aarna Holdings Ltd., a prominent Abu Dhabi-based investment fund that manages Indian capital and also advises clients in Singapore, has taken a significant step toward investing in Latin America by announcing a partnership with the Argentina’s Grupo Werthein. In an interview with Bloomberg Línea, Ameya Prabhu, chairman of Aarna Holdings Ltd., stated that Argentine President Javier Milei has made “all the right noises” to attract investment to his country. Prabhu also considered that “change will definitely come” if Milei can sustain his current economic policies.

The strategic alliance between Aarna and the Werthein Group, reported first by Bloomberg Línea, marks the beginning of a series of investments with a focus on sectors such as agribusiness, mobility, telecommunications, content, chemicals, and infrastructure.

“I hope that by the end of the year we will be able to announce our first transaction,” said Prabhu, who also heads the Indian Chamber of Commerce (ICC).

Aarna’s decision to join the Werthein group, which has 100-year track record in Latin American markets and currently manages the DirecTV and Sky brands in the region, reflects Prabhu’s strategy to boost trade and investment between India and Latin America as the Asian powerhouse grows at an increasing pace.


Milei has made all the right noises. If he follows through and maintains political and economic stability, he will likely put Argentina on the path to solving many of the problems that have plagued it over the past quarter century or so, which would return Argentina to the greatness it had 100 years ago.

Ameya Prabhu, presidente de Aarna Holdings

Prabhu, who manages an estimated liquidity of around US$2 billion at Aarna, also referred to the advantage of having experience investing in other emerging markets. “A 5-6% [inflation] like in Argentina in May would be very high for certain countries, which do not know how to manage inflation, whereas we do know how to manage inflation,” he said.

The following conversation has been edited for length and clarity.

Was Javier Milei’s electoral triumph part of what attracted you to Argentina and Latin America?

Latin America has been a bit undervalued in terms of investments, also in terms of trade. Brazil, because of BRICS is the most looked at country from India and the Middle East. Of course, there are some Indian pharmaceutical companies that are active in Latin American automotive space, also with TCS, which is an IT services company, in agriculture, with UPL, which is a big Indian manufacturer of agrochemicals. But I think in general terms, excluding Mexico, because I would consider it more North America, it has been an undervalued region. We’ve always been interested in it, I’ve visited the region five or six times myself, and we’ve shared a long-standing relationship with the Werthein group, with Dario [Werthein] and the family. Definitely the Milei win has played a role. One concern that many global investors have always had with Latin America is perhaps the lack of certainty in policy, because there are so many changes. I remember interacting with former President [Mauricio] Macri and his team, and we found them to be quite pro-policy, pro-business. He was a president with a very positive mentality. That encouraged a lot of people. But at the same time, foreign investors need to see policy continuity. If Milei is going to be able to provide that, I think that’s something that can be considered. As India grows, you look at avenues of investment globally, and I think Argentina, and even Latin America, will play an important role. Argentina will play a very important role in the future, given its lithium reserves, its renewable energy reserves, its vast wind energy reserves. One could see it as a massive source of renewable energy for the manufacturing industry. If you look at the continent, demand is increasing, because the population is increasing. Culturally, Indians are very similar to Latin Americans. Language can be a challenge, but Spanish is a relatively easy language to learn compared to Mandarin, Japanese or Korean.


Are the sectors you mentioned the ones you have in mind to deploy your investments?

Definitely agriculture will be an important sector that we would like to consider. The automotive sector as well, because these are areas where we have existing businesses. But beyond that, infrastructure, and especially digital infrastructure, which is where Werthein group is quite strong, given its investment in Vrio. One area where we can also see a lot of collaboration is in content, because the beauty of content today is that it transcends language, and India is a country that creates a lot of content. Today we’re seeing programs in Korean, we’re seeing programs in Mandarin, in Spanish, some people with subtitles, some people with dubbing. And of course, I think AI translation will have a greater weight. As the energy transition goes forward, we will need more areas for backward integration. And that’s another area of interest, especially on the renewable energy and sustainability side.

Do you foresee any impact from the Indian elections on foreign investment out of India?

We had an election this week, and the ruling alliance won a majority again, and they will be sworn in probably this weekend. The economy grew about 8.3% last year, which was higher than expected even from our central bank, which expected it to grow in the mid-7% range. It is the fastest growing large economy globally at the moment. The thing is that India itself is growing so fast, so much capital is being invested within the country itself. Certainly as India grows and cost efficiencies and quality efficiencies grow, Latin America is a big market, and you will see an increase in investment from India. I give you a small example, TVS, which is a big Indian motorcycle manufacturer, already has a distribution and an assembly line in Colombia, they also have an assembly line in Brazil, where they are working with Motu, which is a Brazilian motorcycle leasing company. I also foresee investments coming from telecom technology, because we have some companies that are leading in low-cost 5G solutions. And that’s where India can be a big exporter, of low-cost, good quality technology, along with investment.

What is your view on the investment climate for emerging markets as uncertainty continues regarding the Fed’s decisions?

Every country is different, and every region. India will continue to grow and will be a market that will give great returns in the coming years and months. We also have an asset management business focused on India. And we are seeing substantial inflows into our funds right now as we speak. So I think India will certainly do well. China, from a valuation perspective, is quite attractive right now. A lot of investors are looking at that as well. But fundamentally, because of the uncertainty with the government there as well there are investors are avoiding it right now. Vietnam is interesting. It’s a market that a lot of manufacturing is moving to. Indonesia, too, which recently had an election, people are quite excited about Indonesia, and the new incoming president is supposed to be quite pro-business. And in Latam, for a long time, Colombia and Chile were hot markets. But currently, the investment climate is a little bit gloomy. People are positive on Brazil, even if it has had a difficult few years with political uncertainty. On Argentina, I think Milei has made all the right noises. If he follows through and maintains political and economic stability, he will probably put Argentina on the path to solving many of the problems that have plagued it over the last quarter century or so, which would return Argentina to the greatness it had 100 years ago.

Do you think there is more potential for growth and returns in Latam today compared to Asia? Most of the inflows to emerging markets have gone to Asia over the last few decades.

That will continue. I mean, the population is here. But it’s not a competition. It will definitely flow more into Asia, but there will be enough capital flowing into Latam. It’s not a zero-sum game. One advantage that Asia has is good economic growth, a growing population, and also political certainty in certain countries. Now, one advantage Latam has is that it has a lot of resources, and one of the most critical resources in the future, which is water. It has a lot of land, and in general a relatively young population compared to Europe, for example. So I think there are distinct advantages that Latam has, compared to Asia.


El ETF MSCI Latam, con mayor peso en Brasil, ha bajado más del 50% desde su máximo histórico en 2008. ¿Qué les dirías a aquellos que advierten sobre los riesgos y la volatilidad de la región?

There are two types of investors. On the one hand, financial investors, who want to enter stocks more from a short-term perspective. In our fund, we take at least a three- to five-year view. I am often asked what I think of India. Isn’t it too expensive? Our valuations are high. I always say, it depends on your time horizon. If you are looking at it from a short-term perspective, yes, it could be expensive. But if you’re looking at it, from three years onwards, it’s always cheap, because the growth is substantial. I think 2008 was probably a period when people were hyper excited about emerging markets. So I think one should look at growth realistically, not with hysteria. I think 2008, probably before the financial crisis, was a time of hysteria. Life is always about managing expectations, right? Ultimately, if you’re investing in a bond that gives you 7%, and you expect to earn 15%, you’re always going to be disappointed. But if you’re investing in a stock, which gives you maybe 12-15%, and you earn maybe 16%, you’re very happy. Comparing the current picture to what was there at the time is probably not the right thing to do. If you look at the potential going forward for Latam, for us, one advantage we have is that we are doing it with the Werthein Group. We are forward-looking people. Being from an emerging market, investing in another emerging market, your appetite for risk is greater, your ability to invest in another emerging market is greater. At the same time, your expectations are also more aligned. We are not easily scared of inflation. A 5-6% as in Argentina in May would be very high for certain countries, which do not know how to manage inflation, while we do know how to manage inflation.

Do you already have specific targets in mind in Argentina and the region?

We have sectors in mind, we do not have specific targets yet. We signed the partnership with the Werthein Group to explore investments both within their group and in the Latam space. We are constantly working with them to start identifying and refining our strategy to do so. I am also the chairman of the Indian Chamber of Commerce, separate from my role in private business. So, we are also planning to bring the chamber in through our representative offices in Latam, to also help other businesses beyond what we are planning to do. As we refine our strategy, in the next three to five months, we might identify certain targets and start working on that. We are already working in sectors such as automotive, agribusiness, both on the upstream and downstream side, as well as in the telecom infrastructure and digital space. Maybe it would be premature to announce it before we actually make substantial progress. But the strategy is in advanced stages. I also plan to visit the region in the coming months. I hope that by the end of the year we will be able to announce our first transaction.

Do you have any vision or interest in the mining and oil and gas sectors in Argentina?

I don’t see us investing in the oil and gas space, to be very honest with you. While, of course, I know Argentina is a big player in that space, and has been very successful. I think the energy transition is where we are most likely to be or will be in that space. On the mining side, Argentina has potential when it comes to batteries. So I think that could potentially be interesting. Argentina has enormous potential to be a fully integrated supplier in the energy transition. You have substantial wind resources, lithium and mining resources. It can be a really green supplier, along with what they are doing in traditional fuels. Argentina could be a major energy exporter. It’s an exciting time to be in Argentina. Hopefully, under President Milei and his policies, investment will come back into the country, which I think is already slowly happening. Change takes time. There is an election every two years in Argentina. So you also have while you think medium and long term, you also need to think short term, but I am sure change will definitely come.


Are you currently interested in the Mexican market and its nearshoring potential?

Through TVS Motor Company, we actually distribute motorcycles in Mexico. We are currently looking at the agricultural side, because Mexico is a big market for agriculture, and tomorrow on the mobility side, we would definitely be interested. In the world supply chains are becoming challenging. When the Red Sea crisis happened we had substantial delays, not being able to serve our customers in Africa. And I think that’s when you realize that if you can’t deliver the product on time, that’s actually the most expensive thing for you. I see three big trends. One is the “China plus one,” where people want to move manufacturing beyond China, to Vietnam, Indonesia, India and Mexico, among others. The second is to have a diversified supply chain also from in terms of being closer to demand centers. And the third is more sustainable sourcing. It is to be closer to the end customer, from a sustainability perspective. And I believe that Mexico, being next to the economic giant that is the United States, will definitely play an important role in that.

What are the main opportunities you see in Brazil?

The three sectors we talked about, energy transition, agribusiness and in digital, I think those would also be sectors of interest for us in Brazil. There are a couple of other projects, which we are working on right now in India, that are making sustainable fertilizer from sugarcane waste, and it could be a massive scale investment in the Brazilian space. We make potash and in fact, Brazil is a potash-deficient country, which imports a lot. As the economy moves forward, maybe we will focus on areas where people with competitive advantage are not strong competitors. India and Brazil have a very strong relationship. We have a couple of our provinces that also speak Portuguese. So there is also a Lusophone link, there is a BRICS link. Brazil is one of the most exciting countries in the world. I love to go there. There are companies like UPL, which is one of the largest agrochemical and plant protection companies in India. They have almost US$2 billion in sales in Brazil. I always joke that they are really more of a Brazilian company than an Indian company. Marcopolo and Tata have a very successful partnership. And I see, and Brazil, of course, DCS is very present in Brazil.