Indian family office assets are set to grow 1.5x in 3 years, reaching Rs 1.05 lakh crore, says a Julius Baer-EY report. A shift to alternative assets like private equity, AI, and climate tech marks their evolution into long-term capital providers.

Assets managed by Indian family offices are projected to grow 1.5 times over the next three years, as rising wealth and a shift towards more active investment strategies are transforming them into long-term providers of capital, according to a Julius Baer-EY report.The report, Indian Family Office Playbook: Now, Next and Beyond, estimated that Indian family offices managed around Rs 70,000 crore in assets in 2024, with the pool projected to grow at a 14 per cent compound annual growth rate over three years.

Shift in Investment Strategies

The report said this growth is accompanied by a significant change in how family wealth is invested. Around 40-45 per cent of allocations in many family offices are now directed towards alternative assets such as private equity, venture capital, private credit, Alternative Investment Funds, REITs and InvITs.Family offices are also increasingly making direct investments and co-investments, while focusing on emerging areas including artificial intelligence, climate technology, renewable energy, semiconductors, electronics manufacturing, cloud services and data centres, the report said.

Evolving from Preservation to Active Allocation

"Indian family offices are evolving from wealth preservation vehicles into active allocators of long-term capital," Surabhi Marwah, Tax Partner and Leader, Family Office Advisory Services, EY India, said.She said rising wealth creation was encouraging families to invest in private markets and innovation-led sectors, while also increasing the focus on governance, succession planning and professional management.The report noted that India currently has more than 19,000 ultra-high-net-worth individuals (UHNIs), with the number expected to exceed 25,000 by 2031. At the same time, an estimated US$1.3 trillion-US$1.5 trillion of wealth is expected to be transferred between generations over the next decade, increasing the need for stronger governance and succession frameworks.

Professionalisation and Technology Adoption

The report said family offices are consequently moving from founder-led and informal structures towards professionally managed institutions, with greater use of investment committees, family councils, specialised professionals and formal decision-making processes.Technology is also expected to play a larger role, with family offices adopting AI-enabled analytics, integrated reporting, digital workflows and cybersecurity tools. However, the report said AI is best used in the near term to support functions such as data extraction, compliance and due diligence rather than replace human investment judgement.Going ahead, the report expects family offices to play a larger role in long-term capital formation, entrepreneurship and strategic investing, as their investment portfolios and governance structures become more institutionalised. (ANI)(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)