Entrepreneur Hinduja makes ESG waves in finance
The name Hinduja is worldwide. As one of the largest diversified groups in the world, it employs over 150,000 workers and touches almost every sector of our economy. It is also the story of a century of family entrepreneurship. Karam Hinduja is the next generation of Hinduja entrepreneurs who, at 30, are modernizing the family business while staying true to its social philosophy. Recently appointed CEO of Switzerland-based SP Hinduja Banque Privee, I caught up with Karam to see how he is handling his new role and how he plans to connect the bank to the next generation of impact investors and business creators.
Brendan Doherty: Karam, welcome to Impact icons. Let’s start with Timeless, the first business you personally started.
Karam Hindouja: Timeless is my umbrella holding structure. The general premise is: how can we build on content to drive smarter and more conscious action in different areas? Within Timeless, Karma focused on business, financial and investment news. And from an entertainment standpoint, we focused on creating a greater connection to each other, to the planet, to ourselves, and to improving global consciousness. Timeless was created to explore and pursue activities in this area.
Doherty: The effort to drive your readers’ action – where did it come from?
Hinduja: Growing up, I had many experiences where I watched amazing content and pushed myself into some sort of action. I would see the world differently or I would like to act in a new way. It has always been very interesting to me – that you can be exposed to content and it fundamentally changes something in you. It was the initial spark that sat down with me.
Doherty: When I started my marketing agency in New York, I had some ups and downs. Often, the entrepreneurial success story is the one that gets the most attention, but the reality is quite different. Was there a valley or challenge you faced during the early days of Timeless that shaped who you are today?
Hinduja: Yes, it was my first time on the starter course. My spark came from passion and purpose – rather than starting with a compelling business opportunity. It was more of a goal-driven change that I was then trying to find a business model that fits. It was a privileged position that allowed me to be more patient, but it was also a dangerous game to play when you haven’t fully defined your business strategy. Also, the shift from long content to short content, and from written to audio and short video – all of that was changing almost every month and we were trying to figure it out. I think with all of that we fell into trenches and had to do a lot of quick pivots and figure out along the way.
Doherty: It’s not uncommon, especially at a young age, to have a passion to pursue without knowing what the architecture around them should look like. Let’s move quickly – you’re in New York, running Timeless, with these ups and downs, and you get a call from Switzerland about running SP Hinduja Banque Privee. Tell me about that?
Hinduja: It was less sudden than that. I’ve been a member of the bank’s board for about three or four years, so I was very integrated. The company had sort of settled down but now needed a more dynamic business model. As a member of the board, I helped design and modernize it. I was figuring out what new markets we could tap into and how to acquire a new generation of customers. There was talk of my taking up my role as a part-time director of investments. I was in this position for four to six weeks when at one of the board meetings the independent director proposed that I take over as CEO. So it didn’t come from the family, which was interesting and a big vote of confidence. It’s not something I was looking to do, but I realized that it would allow me to keep the same goal but with a different vehicle to achieve it. That’s why I decided to go for it.
Doherty: Were you nervous about taking over a family business?
Hinduja: I was nervous but already being on the board made me less nervous. When you are on the board of directors of a regulated company, you are not at all operational. You are not allowed to be. So stepping into the CEO role was of course intimidating with all the expectations, but it wasn’t stepping into something totally alien.
Doherty: I’m glad you took the opportunity. So this idea of exponential economic and social impact, is it something that is at the heart of banking? Can you give me an example of how you brought this into the organization where it didn’t exist before?
Hinduja: I started by familiarizing the institution with what exists in terms of ESG products. The last thing we wanted to do was the typical game of making dozens of our own products with a focus on ESG and sustainability. That’s pretty much what everyone comes up with and I felt useless. So there are really two things that I think we’ve done.
One is to get in touch with asset managers in the space that are best suited to the products they’ve created and come up with deals where we basically distribute their products. So truly a hub and spoke model where we have a centralized destination for anyone looking to invest in sustainability. We can be their trusted navigator. Building Timeless came in handy because the few dozen phone calls I made were to old friends in various communities like Nexus.
The second thing is to fundamentally change the way we see and engage customers. We are a small, nimble institution and I don’t want to turn into a factory. We want to see ourselves as a business leader for the motivated entrepreneur. If someone like you comes in and says, “Look, this is what excites me. This is how I want to contribute to the world with my money and my time. Help me find the most efficient way to do this. We love these kinds of opportunities. We can build a more personalized ESG solution or introduce you to an interesting person with whom you could start a business.
Doherty: It’s much more of a platform effect that allows you to switch between investment and business creation.
Hinduja: Precisely, we like to see ourselves as a collective. We like to think of our larger network as a community of people where we can connect dots and create value.
Doherty: I remember a recent conversation we had about wanting to serve as a bridge between East-West or India-Europe. Is it still a central element of the strategy?
Hinduja: The short answer is yes. India is of course a big priority for us, but at the same time there are two Indies. There is a traditional India which used to invest in big stocks and traditional industries. And there’s another India that’s a target for impact and ESG investors and the tech community. The two worlds are quite different. We are making progress to really get involved in the new India and it is a different process. Unfortunately, it is more often a matter of looking at Indian entrepreneurs who have started businesses outside India and how we can help them return to India as a trusted partner.
Doherty: You’ve invested in a water treatment company in Singapore as an ESG game – tell me more.
Hinduja: It’s a great company that ticks two boxes for us. Firstly, it focuses on water sanitation in local municipalities with fantastic technology that helps communities access safe drinking water. Second, this is an institutional grade investment opportunity that any bank similar to ours would fit into its mandate. It’s a serious company with serious finances that just raised around $ 100 million in equity from JP Morgan. We got there before that and the fact that it catches the attention of traditional players as well as ESG folks, I think that’s the goal. This is an example of an opportunity that concretely connects the two worlds – attracting significant capital as part of a traditional portion of private equity in a client’s portfolio while ticking the box on sustainability.
Doherty: Your grandfather SP Hinduja spoke a lot about the business mindset and the Vedic principles behind it. Do you see those same roots in what you do? Do you think of business in terms of faith and culture, or do you think more of a purely business mindset for you?
Hinduja: It’s hard to switch for me. I really wanted to ensure that we not only keep the business alive, but that we truly lead with these principles and that we do not forget the humanity or the human element in everything we do. Ultimately, it is the communities that are affected by businesses, whether as employees, consumers or broader stakeholders. Without forgetting that it is central. Creating value for all of these stakeholders is what we call our X factor and that makes these opportunities all the more exciting for us if an opportunity ticks that box. He has our attention. It has the attention of the investment committee, and we want to watch it and explore it and we want to make it work financially. This is the initial threshold – is it something that we think will be good for human beings. It’s hard to measure at the moment, but it’s a priority for us.
Doherty: I always say that capitalism starts with human capital. Thanks Karam!