NEW ASSETS FOR BILLIONAIRES

The uber-rich are gravitating towards contemporary asset classes such as late-stage PE funds and private debt. Here's how they are managing their investment portfolios.

- AVNEET KAUR

AS RECENTLY AS A DECADE AGO, it was common to find ultra high net worth individuals (UHNIs) and well-known business families without a comprehensive plan for their personal wealth, often with unfortunate consequences. Thankfully, the tide is shifting, says Zia J. Mody co-founder and managing partner, AZB & Partners. Not a day too soon. India is, after all, home to 13,637 UHNIs. In 2021, the number grew 11% year-on-year, the highest growth in Asia Pacific region, shows Knight Frank data. The number of UHNIs—individuals with net assets of $30 million or more—in India grew a whopping 84% between 2016 and 2021. The big question is, where do this uber-rich invest? What are their investment objectives? Which are the new assets they are dabbling in? Here’s a glimpse.

UHNIs, who used to rely on a mix of equity, fixed-income instruments and gold, have shifted towards alternative asset classes, with preference for later-stage private equity (PE) to avoid start-up risks. Over 40% family offices have doubled their allocation to private markets in past five years, says a report by Trica, a private market platform. With total commitments of ₹6.4 lakh crore, assets under alternative investment funds (AIFs) are expected to cross ₹50 lakh crore by 2031, as per a PMS Bazaar Report. AIFs are privately pooled investment vehicles that raise funds to invest in unconventional categories such as venture capital, real estate and SME funds. The age-old passion, luxury real estate, has also gained traction as economies open up after the pandemic. E-commerce boom, express delivery and ‘same day return’ policies have attracted UHNIs towards warehousing as well.