Despite feuds rocking some of the large corporations, Indian family businesses continue to overlook succession planning with only a minority having undertaken the exercise, a report said Monday.
Only 19 per cent of families have formally agreed or written succession plans, said the report which examined 78 ultra-high networth families with an average net worth of USD 645 million and assets under management (AUM) of USD 318 million.
The report by Edelweiss Private Wealth Management (EPWM) and Campden Family Connect(a joint venture between UK’s Campden and the Patni Group to manage private wealth) however, said the next generation is already coming into the fold, with 56 per cent of them holding either family office or wealth management roles.
“India has about 150,000 high networth families with a cumulative net worth of USD 2 trillion. This number is expected to rise to four lakh high networth families with a net worth of USD 5 trillion by 2025,” EPWM head Anshu Kapoor said.
It said fixed income and equities are the two most favoured investment classes and there is a keen interest to track opportunities in private equity or venture capital.
The report said 58 per cent of families are interested in setting up a family office themselves or joining one and added that half of them are already in the process of doing so.
“There are only about 45 formal family office structures in existence demonstrates a dearth of understanding on the purpose and services offered by family offices,” Campden’s director Amit Patni said.