India's Family Offices Transform: Diversification & Global Expansion
A new EY-Julius Baer report reveals Indian family offices are shifting focus from wealth preservation to global diversification, with interests in equities, real estate, and private equity. The growing trend, driven by first-generation entrepreneurs, marks a transformative era in wealth management, emphasizing governance, transparency, and cross-border strategies.
- Country:
- India
The recently unveiled EY-Julius Baer report, 'The Indian Family Office Playbook,' outlines a significant transformation among India's ultra-wealthy families. While 25% remain focused on wealth preservation, a substantial shift towards global and alternative asset diversification is evident.
Family offices, private advisory firms for the ultra-rich, continue to play a pivotal role. The report highlights an increasing trend of expanding portfolios beyond traditional assets. Indian family offices are now investing heavily in global equities, real estate, private equity, venture capital, and other alternatives.
With over 300 family offices currently operating in India, compared to just 45 in 2018, this sector is rapidly evolving. The facilitation of cross-border expansion through the Liberalised Remittance Scheme has seen remittances soar from USD 18.8 billion in 2019-20 to USD 31.7 billion in 2023-24. The growing number of UHNWIs is driving investments into innovative sectors by first-generation entrepreneurs through family offices.
Private credit is becoming popular for its stable returns and diversification benefits. Julius Baer India's CEO, Umang Papneja, underscores the increasing focus on risk-tolerant entrepreneurs, strengthening governance, and legacy planning. EY India's Surabhi Marwah emphasizes the need for efficiency, transparency, and navigating complex regulatory frameworks.
Despite this evolution, private market adoption remains limited, as 57% of family offices allocate less than 10% to private equity or venture capital. Regulatory issues remain a concern, with changing tax laws and cross-border complexities prominent. The report also points to an increasing emphasis on governance and succession planning. While many families have established basic structures, a comprehensive approach is still lacking.
The report identifies key trends: increased cross-border investments, use of GIFT City, interest in ESG, and hybrid family office models blending in-house and external expertise for agility.
(With inputs from agencies.)
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