The case for direct investing in private markets
investing has grown by leaps and bounds creating a vibrant startup ecosystem in India.
The Private Market Play
Ultra-high-net-worth (UHNW) individuals and family offices got onto the early stage investing opportunity through the Private Equity and the venture funds route which made such opportunities available and popular. But fund investing has its own set of constraints and may not be the most optimum vehicle for all investors seeking early-stage investing.
Therefore, many Family offices and UHNI investors have ventured into building independent portfolios of unlisted equity and structured convertible debt options directly instead of participating through funds. There are several reasons for this trend to emerge and gain momentum.
Opportunity to Build a Focused and Concentrated Portfolio
Building your own portfolio directly allows large investors to commit capital on a deal-by-deal basis rather than through a fund. This has two key advantages: The performance clock starts ticking when the investment takes place rather than when the capital is committed. Secondly, investors retain full discretion on which sectors, companies and deals to participate in and at what stages of investing.
Growth and Acquisition Objectives
Private firms often target niche and underserved markets and segments that their larger companies overlook. By identifying and investing in start-ups with specialized products, services, investors gain exposure to unexplored markets and their growth potential. It also give insights into emerging
