New Delhi, July 28 -- Indian family offices are increasingly looking to professionalise their setup and institutionalise capital allocation according to their desired thesis, panellists at the VCCircle Family Office Summit 2026 said.
The family offices are also adopting different exit strategies but often lack a strong framework to manage risks, the panellists said at a discussion on the 'Private Market Playbook' at the event held in Mumbai.
The panellists were Sagar Tanna, chief investment officer at Alchemie Ventures (the family office of the Aarti Group); Shishir Srivastava, director at Premji Invest, the family office of Wipro's Azim Premji; Subodh Gupta, executive director at RP-Sanjiv Goenka Group; and Imran Jafar, executive director at private equity firm Gaja Capital.
Talking about the beginnings of Alchemie Ventures in 2022, Tanna said, "The first-generation promoters started running the business, and the second generation also joined. Over time, we professionalised the group. As the group grew in asset size, the promoters became very cognizant of the value professionals could add to the family office. That's what kind of triggered this (setting up a family office)."
He said that the firm allocates capital to only specific sectors and has identified what it won't invest in.
Gupta of RPSG Group said the conglomerate's family office is used as a "quasi-strategic investment tool" to implement some of the portfolio companies' processes within group companies.
"We looked at investing in deep-tech funds to start with, and the reason was not just investing directly in them, but also in a lot of their portfolio companies, which are still young. It's almost, I would say very difficult, if not impossible, for them to reach out to larger players to test their hypothesis whether it's a product or a service, and we did it the other way around," Gupta said. He added the family office reached out to these companies and funds and ran pilots across RPSG group companies in sectors such as battery chemicals, music, and retail.
RPSG Group also invested in newer-age businesses such as space-tech, advanced manufacturing, and semiconductors. "Those also are the ways you can take relatively lower risk, invest in some of the portfolio companies, understand the ecosystem and build the next billion-dollar business in the next five years," he said.
Jafar from Gaja Capital said family offices are, at times, better positioned to invest directly in companies in the innovation economy and in businesses where they have expertise and talent.
"For instance, if your wealth has been created over the last few decades as a family in manufacturing, your ability to invest in a portfolio of startups that need you as a customer to run pilots to discover product-market fit, you have a significant advantage over just another financial investor," Jafar said.
However, for capital diversification, fund managers from large financial institutions were better placed to allocate family wealth, he said.
"What is not good is to just experiment with direct investing. You'll notice from the data that family offices had invested a lot at late-stage VC in the peak of 2021. It was nearly $8 billion, and that just crashed to single digits. So, family offices are now also discovering what they're good at in direct investing and where capital allocation is meant to be. About diversification, they rely on managers who have expertise to allocate that," he said.
Family offices are less than 10% of Gaja Capital's limited partner base as of now in the fourth fund. However, Jafar said he expected this number to rise over the next five years.
About the geopolitical headwinds, Srivastava from Premji Invest referred to them as "blackstone events," with fund managers that utilise them as opportunities to invest would stand differentiated.
"The good part in private equity and VCs is that you can't panic-sell. There is no liquidity. So, these are opportunities through such geopolitical events where you can double down on your investments," Srivastava said. "These are great opportunities to put more capital. But as a fund manager, you need to remain calm, and you need not be looking to panic-sell in such instances," he added.
When asked to pick sectors that Premji Invest was focusing on, Srivastava pointed to speciality chemicals, artificial intelligence-led investments in financial services and certain consumer sectors.
"It's always good to choose certain pockets, one where you think there will be secular growth because there is an underlying theme which is affecting it and second sectors which we understand well enough so that we can have a nuanced view on that," he said.
Exit strategies, risk framework
Tanna said Alchemie Ventures' investments are backed by an intent to scale the firm before it strategises exits.
"Our thought process is very clear that we must first scale the company, make it IPO-ready or exit-worthy, and we are not in a hurry. We are giving a long, long road to the founders. We want to help them scale."
However, Gupta from RPSG Group said exits hinge on the family's need for liquidity, and hence managers need to take a balanced approach to exits.
"The key is the right mix in terms of various asset classes and liquidity profiles. That's the most important thing we try to look at, at least when we build it," he said.
Srivastava added that the risk governance framework is what differentiates treasury operations from 10-15 years ago and which most newer family offices were lacking in.
"The risk framework needs to include vision alignment between GP and LP, having a family office board, having an investment committee with enough voices, which are external and not internal voices. What are going to be your sourcing strategies? How are you going to add value to the portfolio company? And finally, within that risk framework setup, what is your exit strategy? How will you go about per sector allocation, concentration limits, diversification, hedging? All of this comes within that risk framework," he said.
Published by HT Digital Content Services with permission from VC Circle.