India may see $1.5 tn family wealth shift

India is set to witness a significant shift in family wealth, potentially amounting to $1.5 trillion over the next ten years, according to a recent report by Julius Baer-EY. This intergenerational wealth transfer is expected to create a substantial pool of capital for family offices and alternative investments. Family offices are increasingly formalizing their governance, forming investment committees, family councils, and advisory boards, and hiring specialists such as chief investment officers, chief financial officers, and risk managers.

Their investment portfolios are diversifying, encompassing alternative investment funds (AIFs), startups, private equity, venture capital, private credit, and real estate assets like REITs and INVITS, often through complex offshore structures. This trend is likely to bolster the alternatives market, which currently stands at around $400 billion, with potential growth to exceed $2 trillion by 2034, driven by higher participation rates among high-net-worth individuals (HNI), supportive policies, and the demand for more lucrative and uncorrelated investment opportunities.

India currently boasts over 200 billionaires, the third largest number globally after the US and China, with a combined wealth of nearly $1 trillion. Additionally, the nation is home to more than 19,000 ultra-high-net-worth individuals, with assets exceeding $30 million, a figure projected to surpass 25,000 by 2031. This growth has been propelled by IPOs, private equity exits, and founder liquidity events.

Surabhi Marwah, a tax and leader in Family Office Advisor Services at EY India, noted that every time there is an exit or an founder liquidity event, these wealthy families approach them for assistance in structuring their investments.