India's ultra rich are diversifying wealth with private equity, AIFs and global bets

Time of India

6 hours ago

India's ultra-wealthy families are moving beyond wealth preservation to embrace riskier, more diversified investment strategies, with a growing preference for global markets and alternative asset classes, according to the EY–Julius Baer report titled The Indian Family Office Playbook, released Thursday.
The report captures a structural shift underway in India's family office ecosystem, which has grown from just 45 family offices in 2018 to more than 300 today. While 25% of these offices still prioritise capital preservation, a growing number are now allocating capital across private equity, venture capital, global real estate, and other non-traditional assets.
'India's family office ecosystem is at an inflection point where wealth preservation alone is no longer enough,' said Surabhi Marwah, Co-leader, Private Tax and Partner, People Advisory Services – Tax at
EY
India. 'Families now seek efficiency, transparency, and global access, all of which require a more structured approach. At the same time, navigating tax and cross-border regulatory frameworks is becoming central to how these offices function and plan ahead.'
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From preservation to performance
Many of these family offices, especially those catering to first-generation entrepreneurs, are led by younger wealth owners with higher risk tolerance and deeper sector expertise.
The report notes that more than half of the surveyed family offices have allocated over 50% of their portfolios to growth-oriented assets, with over a quarter allocating more than 20% to private equity and venture capital alone.
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While traditional allocations to public equities, bonds, and cash remain part of core strategies, they are increasingly being complemented by exposure to portfolio management services (PMS), alternative investment funds (AIFs), private credit, REITs, InvITs, and even art.
India's alternative investment industry, comprising PMS and AIFs, is on track to exceed ₹100 lakh crore in assets under management by 2030, the report estimates.
Recent regulatory and tax changes are making this space more attractive: SEBI has eased investment norms for Category II AIFs, and the 2025 Union Budget clarified that the sale of securities by AIFs would be taxed as capital gains, reducing compliance burdens.
Global reach, local strength
Indian family offices are also rapidly globalising, driven by both necessity and opportunity. With Liberalised Remittance Scheme (LRS) outflows rising from $18.8 billion in 2019–20 to $31.7 billion in 2023–24, Indian UHNIs are increasingly investing across borders—in private equity funds in the U.S., real estate in Europe, and venture capital across Asia.
Cross-border partnerships are becoming more common as family offices collaborate with global peers to gain access to a broader range of opportunities and diversify risk. At the same time, India's own regulatory ecosystem is evolving to support this ambition, with GIFT City emerging as a preferred base for family office operations seeking international exposure and tax efficiency.
'The era of one-size-fits-all investment is over,' the report states. 'Sophisticated, tailored wealth strategies are becoming essential, particularly for younger, tech-savvy founders as well as legacy industrial families navigating succession and sustainability.'
Structuring for complexity
Alongside asset diversification, Indian family offices are investing in governance, succession planning, and institutionalisation.
According to the study, 59% of families have implemented wills or constitutions, and 19% have set up structures like trusts or LLPs. This reflects a growing awareness of the importance of structured transitions in preserving legacy and continuity.
There's also growing interest in impact investing—not just as a tool for philanthropy, but to align capital with long-term values and sustainability goals.
In this context, family offices are increasingly engaging professional advisors and leveraging digital platforms to manage complexity. As wealth spreads across geographies and generations, families are are navigating agile, compliant, and transparent structures that can respond to global risks and opportunities alike.