In the early 2000s, Family Offices (FOs) as a concept was barely known. There were not more two-three family offices in the country – which included one the first of its kind Patni group’s RAAY Global Investments.
While on the side, working at the Deutsche Bank, Himanshu Kohli could see India getting richer. He saw an opportunity in the private wealth management space.
Kohli also noticed there is a shift in asset allocation where people were moving from traditional assets like gold and property to financial services.
It was only a matter of time, Kohli calculated the risk, left his cushy job to take up entrepreneurship started India’s first Multi-Family Office (MFO) – Client Associates (CA).
For those of you who are new to the concept, FOs are models through which the HNIs and Ultra HNIs manage their wealth, succession plans, taxation, asset management, investment and host of other financial services.
There are two kinds of FOs, first is Single Family Office (SFO) which we set up by the family itself with a dedicated amount of fund and help of professional and second, is the MFO which a boutique company providing the same services but to multiple families.
In conversation with Entrepreneur India, Kohli shares his insights on the private wealth management segment and the country just began to realize the immense pool of opportunity in this space
Starting CA was a very calculated risk for Kohli. He was passionate about numbers which added to his emotional quotient while crunching number was also a comfort to him which contributed to the intellectual quotient.
Today, Kohli aims that CA should be one top preferred private wealth management company but setting up the venture wasn’t an easy task.
“We didn’t have neither any brand backing behind us nor any financial capital to back us. It was just the intellectual capital or the passion to do something different which was prompting us to launch something like this,” he shared.
Additionally, since the concept was very new in the early 2000s, explaining how MFOs work was another challenge that the company faced.
This is what prompted CA to focus on three key pillars – Team, Target Audience and Trust which would help Kohli grow this business.
He says private wealth management is a people-oriented business and you need to have the right team with the right mindset on board.
Elaborating on his target audience, he shared instead of increasing the number of families, CA focused deepening the relationship with the right clients.
“We work with very few families but with deeper level engagements. The family who have more than INR 100 crores of overall wealth but maybe INR 5 crores of liquidity, that could be the target audience for us,” he said while adding, “ The profession of managing wealth is nothing but managing trust and relationships. Unless you follow the right practices, you won’t succeed over the period time and hence, transparency is very important.”
With wealth creation happening across segment and India adding more and more new age entrepreneurs in the segment, the game has just started to roll for the private wealth advisors in the country.
Kohli feels if the trend of wealth creation continues and wealth moving from traditional asset classes/ businesses towards financial assets/ new age businesses, family office as space will grow at a very healthy rate for the next few decades.
“As per me, this is going to be a sunrise profession for the next 50 to 100 years. India will see a similar growth of this profession as we have seen this profession evolving and shaping up in the United States,” he noted.
Talking about the key trends in the segment, the private investment banker notes that HNIs are looking to nurture the entrepreneurship ecosystem in the country.
“They want to do some early stage investments and are keen to invest at the various stages – from an idea to private equity space. FOs have started believing in value creation,” he pointed out.
Additionally, FOs are also opening looking at passion investment. So for example, if somebody like sports, they are investing in IPL or Futsal.
To add on further, as distances have become smaller, FOs have also become more global in nature. Hence they are trying to create the right kind of structure so that their succession plans are met comfortably.
“They are not just relating to wealth within India and going beyond India. Keeping one egg in one basket may not be the best of approaches. India is a great opportunity but you need to diversify,” he concluded.