New status symbols: How India’s family offices are redefining the investment paradigm
Subscribe to enjoy similar stories. For a new generation of Indian family offices managing the wealth of freshly minted tech and startup billionaires, real estate no longer holds the bragging rights it once did. Their new buzzwords: stocks, private equity, alternative assets, Reits, InvITs, and startups.
It's not that family offices have completely ruled out real estate investments, but the number of such clients heavily focused on direct real estate investments is steadily shrinking, according to wealth management and family office executives Mint spoke with. “There was a time when clients would brag about their most recent real estate acquisition. We believe those bragging rights have shifted," said Sunil Sharma, chief investment strategist, Ambit Global Private Client, the wealth management arm of financial advisory firm Ambit.
“Clients today are far more interested in bragging rights about their most recent private equity investments." Traditionally, India’s family wealth has been focused on investments in ancestral homes, land banks, properties, and gold. However, a decade-long slump in real estate until 2022, unattractive rental yields, regulatory hassles, and the time and resources needed for managing property have dimmed the sector’s draw, said Sharma. On the other hand, potential higher and faster returns from equities and private equity have led to a notable shift in investment preferences.
“Alternative asset exposure in client portfolios, which typically averaged 5-10% during the past decade, is now averaging 15-20%, and in many cases, it exceeds 50% of the portfolio," Sharma added. “On the flip side, our engagement with clients on physical real estate has remained generally steady." Vikaas M. Sachdeva,
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