The shift reflects a strategic move toward diversification, niche investment strategies, and active participation in India’s growth story, particularly through startups and innovative ideas.
Alternative Investment Funds (AIFs) are gaining traction among Indian family offices as a preferred tool for accessing private markets and startups. AIFs offer a diversified portfolio that mitigates risks compared to single investments, according to Sundaram Alternate’s report.
The expertise provided by AIF managers in selecting opportunities across the risk-return spectrum is driving this trend, with many family offices opting for co-investments with existing funds to execute high-conviction strategies with minimal operational challenges.
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“Family offices in India are at a pivotal juncture where the integration of traditional values with modern investment strategies is driving significant growth. Our report underscores the importance of governance, diversification, and talent management in shaping the future of family offices. As they navigate this complex landscape, it is crucial that they remain agile and forward-thinking to capitalize on emerging opportunities and sustain their legacy across generations,” said Vikaas M Sachdeva, Managing Director of Sundaram Alternates while commenting on the report findings.
The report details expected shifts in asset allocations for family offices over the next three years. Allocations to Mutual Funds, PMS, AIFs, and gold are anticipated to see modest increases, while fixed income and physical real estate are likely to experience a decrease. The allocation to startups is expected to remain stable as family offices continue to explore and capitalize on opportunities in this sector.
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