Indian family office assets are expected to grow 1.5 times over the next three years, driven by rising wealth creation, promoter exits and a shift towards institutionalised investing, according to a joint report by Julius Baer India and EY India.

Family offices are expected to increase allocations to artificial intelligence (AI), private markets, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs) and other alternative assets, while continuing to maintain listed equities as the core of their portfolios. The report estimates family office assets will rise from ₹70,000 crore in 2024, supported by an expanding ultra-high-net-worth (UHNI) population and greater participation from the next generation of business families.

Surabhi Marwah, Tax Partner and Leader, Family Office Advisory Services at EY India, said the projected growth is being driven by multiple factors, with fresh capital creation playing the biggest role. She pointed to the initial public offering (IPO) exits, offer-for-sale (OFS) transactions and promoter stake sales that are creating investable wealth for both first- and second-generation entrepreneurs.

“The capital available is one of the largest bets that’s leading to this growth,” Marwah said. She added that India’s ultra-high-net-worth individual (UHNI) population is expected to rise from around 19,000 to nearly 25,000 over the next few years, creating more capital for long-term investments.

Marwah said investment decisions are also becoming more structured as younger family members take a greater role in managing wealth. According to her, the second generation is more familiar with global investment themes, technology and emerging sectors, leading to portfolios that are increasingly managed through formal investment frameworks rather than individual preferences. She said this trend is expected to improve portfolio construction and capital allocation over time.

Ashwin Patni, Head of Wealth Management Solutions at Julius Baer India, said family offices continue to keep listed equities at the centre of their portfolios, but are steadily increasing exposure to alternative investments. “People are very comfortable, especially with their long-term money, to take a meaningful risk, a calculated risk,” he said.

He noted that families are systematically allocating capital to private markets, REITs, InvITs and other real assets as part of a strategic diversification exercise instead of making opportunistic investments.

Patni said AI, climate technology and renewable energy have emerged as important investment themes, although many of these sectors are still in the early stages of their investment cycle. “Returns are probably in the future,” he said, adding that family offices are increasingly choosing to become active participants in these sectors rather than remaining passive investors.

Marwah said AI is influencing family offices in two ways. Besides becoming a preferred investment theme, it is also being adopted to improve governance, investment monitoring and reporting. She said AI-powered tools are helping family offices evaluate investment opportunities, monitor portfolio performance, strengthen cyber risk management and generate real-time management information as investment portfolios become larger and more complex.

Patni also highlighted global diversification as an area where Indian family offices can improve. He said many investors continue to evaluate opportunities only through a domestic lens, despite increasing integration of global markets. According to him, family offices should benchmark Indian sectors and valuations against international peers while also considering global risks when constructing portfolios.

Marwah said there is no standard formula because portfolios differ across families. However, she noted that around 40-45% of allocations are now moving towards alternative assets, alongside continued exposure to listed equities, reflecting the growing role of private markets and new-age investment opportunities in India’s family office ecosystem.

For the full interview, watch the accompanying video

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