Creating holistic value for family businesses

_“Family offices have been investing in the startup ecosystem as a separate asset class for some years now. However, most of the investments are made and managed by such family offices as a passive investor: usually as a follow-up round with friendly VCs. However, the opportunity in this asset class in India is massive and family offices can play a more critical role. They can be mentors to young entrepreneurs and at the same time learn the art of innovation from them. A well-balanced portfolio of investments can give them disproportionate returns and learnings for their existing businesses._”

_“Indian family offices are keenly looking at diversifying their investments across asset classes (including real estate, debt, public equity, startups and other alternative investment products). They are also looking at investing in other geographies to gain exposure to various currencies, thereby mitigating currency risk. Geographical diversification is partly driven by the desire of the younger generation to study and settle abroad, which has led to families aiming to create a corpus for the next generation in other countries.

Further, as families become large, family governance, constitution and succession planning have become more critical than ever before. Without a clear structure and a set of guidelines, conflicting interests may lead to rifts within the family which could destroy the value of family-owned businesses. With family offices playing an increasingly important role beyond just wealth management, it would be interesting to watch their evolution and contribution to the overall development and maturity of the business and financial landscape in India._”

_“The family office goes far beyond mere wealth management. It requires a holistic approach, binding family members with a common purpose and values that spur them on to take forward the business collaboratively.

It also involves grooming key talent so that they grow into strategic institutional members who can drive business growth. Moreover, it entails putting together a central repository of family legacy, chronicling examples of past generations’ hard work and crisis management that paved the path to success. It brings together family members through retreats, events and storytelling to discuss and find solutions to challenging issues.

The family office also plays a crucial role in preparing the next generation, making them feel connected to their roots, and nurturing the abilities of individual members to have them realise their full potential and emerge as their best versions.

It embodies six core qualities to be cultivated – legacy preservation, unity and purpose, wealth stewardship, relationship building, adaptability and innovation, and talent development._”

_“The rising influence of family offices underlines the evolving wealth management and financial advisory services landscape in India. Over the last few years, family offices have secured an integral spot in India’s financial ecosystem, offering specialised services catering to the unique and complex requirements of high-net worth individuals and business families.

A wide range of factors have influenced the growth of family offices in India, including a spike in the ultra-high net worth population, focus on wealth transfer down generations, global nature of assets and the growth of ‘impact investing’, which denotes combining social and environmental goals with financial returns.

By their nature, family offices are uniquely positioned to facilitate all the above asks. Going forward, it is crucial for family offices to keep adapting to the evolving investment landscape, given the changing market conditions and emergence of new asset classes.

This is also intrinsically connected to the ability to hire the right professionals, for which family offices need to show some creativity in developing hiring and retention strategies so as to onboard the right workforce, with the required domain and sectoral knowledge to ensure longevity and success._”