Indian Family Offices Expand into Global and Alternative Assets
India’s rich and mighty individuals are diversifying into global and alternative assets to grow their assets through family offices, according to the recently published EY-Julius Baer report 'The Indian Family Office Playbook'. The report highlights a significant transformation in the Indian family office landscape, noting that the number of family offices operating in the country has grown to 300 from just 45 in 2018. This growth reflects a more structured, globally focused, and purpose-driven ecosystem.
The report points out that allocations are increasingly moving into global equities, real estate, private equity, venture capital, and other alternative investments. This shift is driven by ultra-high net worth individuals (UHNIs) expanding their horizons across borders. The Liberalised Remittance Scheme (LRS) remittances have risen from $18.8 billion in 2019-20 to $31.7 billion in 2023-24, underscoring the growing international presence of Indian family offices.
Private credit, though still a small segment, is emerging as a key asset class for family offices. The report highlights that family offices are increasingly embracing private credit for its stable returns, downside protection, and diversification benefits. This diversification strategy is crucial for mitigating risks and maximizing returns in a volatile global economic environment.
The growth of family offices in India is not just about financial gains; it is also about fostering a more structured and purpose-driven approach to wealth management. Family offices are increasingly focusing on sustainability and social impact, aligning their investments with broader social and environmental goals. This trend is expected to continue as more UHNIs seek to create a lasting legacy beyond their financial wealth.
The EY-Julius Baer report also emphasizes the importance of collaboration and knowledge sharing among family offices. As the ecosystem becomes more structured, there is a growing emphasis on best practices, regulatory compliance, and strategic partnerships. This collaborative approach is essential for navigating the complex regulatory landscape and ensuring the long-term sustainability of family office investments.
In conclusion, the rise of family offices in India represents a significant shift in the country's wealth management landscape. With a growing focus on global and alternative assets, these family offices are well-positioned to capitalize on new opportunities and create a more diversified and resilient portfolio. As the ecosystem continues to evolve, family offices are likely to play an increasingly important role in shaping the future of wealth management in India.
