Family offices are emerging as a major force in the global economy, controlling about US$5.9 trillion ($7.8 trillion) in assets under management (AUM), with the expanding Indian diaspora spearheading the growth of family offices worldwide, a report commissioned by DBS found.
The 6th edition of Global Indian Family Offices: Evolution of the Indian Diaspora, which delves into insights from 13 of the most successful entrepreneurs and philanthropists from the Indian diaspora, was released on Nov 5.
The report found that since 2018, the number of family offices in India has grown from 45 to 300, reflecting the growing wealth of India’s diaspora.
At present, there are more than 13,200 Indians having an estimated net worth exceeding US$30 million. This number is expected to increase by over 50% from 2023 to 2028, the highest growth rate globally.
According to the report, this growth is fuelled by a desire to preserve and grow family wealth and pass down family values across generations.
In 2023, around 6,5000 high net worth (HNW) Indians were estimated to have left India to seek new opportunities in Singapore, Hong Kong and Dubai, among other locations.
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Singapore is a top destination for ultra-high net worth (UHNW) Indian families looking to establish a family office outside of India, given its stable political and economic climate, favourable business environment and tax regime.
Despite this, Indian culture and values continue to play a role in influencing how UHNW diaspora Indians invest their wealth and practice philanthropy, with philanthropy being more structured and “proactive”, the report notes.
While impact investing has grown in popularity, most UHNW Indian diaspora families prefer a more conventional approach to philanthropy that centres around charity with no expectation of returns.
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The report found that real estate and gold are no longer “strongholds” for UHNW Indians’ wealth, with families increasingly diversifying their portfolios into public and private equity market investments, including alternatives.
Furthermore, startups are attracting Indian diaspora wealth, with younger family leaders allocating more of their wealth into growth sectors including technology startups.
Looking ahead, the need for legacy planning has deepened, with many considering instituting a succession plan to ensure a smooth transition to the next generation, even when their children explore pathways beyond the family business.
Lee Woon Shiu, group head of wealth planning, family office and insurance solutions at DBS private bank, notes that “as the Indian diaspora grows its wealth, many are establishing family offices in jurisdictions all over the world. In fact, a significant number of them call Singapore home, in part thanks to the Singapore government’s strong support towards the establishment of family offices here.”
“Through working with these clients, we can confirm their deep desire and ability to further grow and contribute to the local communities in various ways. This is congruent with the findings of our report,” Lee adds.
