By Nesil Staney
The unique demographic trend in India has made it a hot bed of activity for intergenerational wealth transfer and family offices (FO), which provide investment management, estate and succession planning, tax advisory and philanthropic advice. A projected $1.3 trillion in wealth is expected to change hands to the new generation over the next 10 years, according to reports.
“The next generation is driving this change by being more adventurous, globally focused, and impact oriented. Technology, governance, and sustainability will define the next chapter for family offices in India, said Surabhi Marwah, Partner, People Advisory Services, and Private Client Services Co-Leader, EY India, in a report posted on LinkedIn.
These FOs are increasingly investing in alternative assets such as private equity, real estate and direct investments in booming startups industry, opting to sell out during initial public offerings (IPOs), and reinvesting, thus a vicious circle. As a result, they have also become one of the biggest forces driving innovation in India, said the CEO of a large FO, based in Mumbai.
FOs are also investing hugely in the latest technology to manage wealth.
This has intensified structured FO models for India, which balances tradition with innovation, and preservation with growth, said experts. Hybrid models and governance have become central to these firms. While the most common structure is the single-family office (SFO), there is also a rising demand for multi-family offices (MFOs), which serve multiple families and offer cost efficiencies.
There are models where dozens of them co-invest for small advisory fee, said one such service provider,Technology reshaping family offices include rapid adoption of SaaS platforms, AI-driven decision-making, advanced MIS systems, and secure digital infrastructure to manage complex, multi-asset portfolios efficiently, said EY. Key challenges include navigating complex tax and regulatory frameworks, operational complexities, and cybersecurity risks, which is a blind-spot.
Akash and Anant Ambani are the richest individuals in India with a net worth of `3.59 trillion each. Isha tops the women’s list, according to the 360 ONE Wealth Creators list published mid-June.
The transfer of large wealth to younger generation, among ultra-wealthy (UHNIs) is driving new age technology adoption and transparency in FO, a traditional business.India is witnessing a sharp increase in the number of family offices, from just 45 in 2018 to nearly 300 in 2024, said Swiss Bank Julius Baer. With approximately 13,000 UHNW families today, expected to grow to 19,000 by 2028, the segment is expanding rapidly, it said. The huge intergenerational transfer is despite 41% of families not formalised their succession plans, it said.
Around 11,000 FO exists around the world, said PricewaterhouseCoopers, another from the big-four accounting firms. US remains the most important target market for FO investments worldwide, it said in a report, with a deal share at 47%, while Europe has lost ground, with its share declining recently.