Sarbajeet K Sen
India’s super rich are increasingly setting up dedicated family offices to manage their wealth. Munish Randev, Chief Investment Officer, Waterfield Advisors, which provides family business advisory services to ultra high net worth families managing over $1.7 billion of assets, spoke to Moneycontrol on the money management preferences of the wealthy families.
What is the minimum investible wealth that one should have to be your client?
At Waterfield most of the new families that we are on-boarding have an average financial portfolio (not counting the promoter equity stock) size upwards of Rs 300 crores.
What are the various advisory services sought by these ultra high networth families (UHNW) families and Ultra High Networth Individuals (UHNIs)s?
The families and individuals with whom we work have very different wealth management needs and hence all services are customised for each family. Our advisory covers all areas from wealth structuring, succession planning to managing financial portfolio. We even advise clients on their philanthropic ventures for sustainable giving.
Are you seeing an increasing trend of Indian Ultra HNIs setting up family offices?
We are witnessing a fast change in the thought process regarding the need for family offices. While earlier many families were not too keen but over the last 3 years we have seen a growing understanding and acceptance for a well-structured family office. This change has been aided by the emergence of a new breed of ‘pure advisory’ platforms like Waterfield. Both old generation promoters and the new age start-up entrepreneurs are reaching out to help them in the process.
Are the investment needs and processes for these wealthy families different from the general investing community?
All family offices use the same principles of investing as most investors do but due to the difference in the complexity and size of the portfolio the planning, executing and monitoring processes are much more advanced in nature. The focus on risk as compared to pure returns is very much magnified. Also the portfolio is not treated like one single pool but the families have different aspirations for different sub-pools.
What are the preferred asset classes and sectors for investment sought by these family offices?
There are no preferred asset classes or sectors as such. Basis the final plan for the portfolio the best suited products are chosen to arrive at the risk/return profile needed for that particular allocation. The choice of products and sectors is an outcome of the plan rather than a transitory preference. In the current times there is strong focus on the alternate debt space since the yields have come down over the last year. Almost all our families have exposure to the alternative investment space via venture capital funds (VCF), unlisted equity investments, hedge funds etc.
Are the family offices more risk-taking in their investment preferences?
It is a common misconception that the family offices are more risk taking in general. Actually the families have equal focus on wealth preservation and wealth creation. Since the size of each investment is usually large the higher risk investment tickets gather more focus from the market. So while you may often read about new investments done by a family office in the start-up space you generally don’t hear about the investments in simple products like bonds and mutual funds.
Are UHNI keen to invest abroad to diversify portfolio including real estate?
We have seen a growing interest among our managed families for globalisation of assets. On the financial portfolio side some families are having actively managed portfolios overseas. Real estate has been bought with both ‘self-use’ and ‘investment’ in mind. So while we have helped some families find their overseas second homes we also have seen certain capital being allocated towards investment grade properties, primarily residential.