The reward of a thing well done is to have done it.

- Ralph Waldo Emerson

Lately, an increasing number of ultra high net worth individuals in India have been rewarding themselves for deeds well done. There is an increasing trend among executives and promoter families to substantially reduce their interest in their businesses, both in terms of involvement and in terms of funds engaged. Monetising ownership assets by way of liquidating their stake and encashing the same has been on the rise amongst such families and executives.

Monetising of ownership assets involves large sums of money and these funds serve as nesting eggs for the families. These families then naturally feel an obvious requirement for professionals to help them put these funds to optimum use. Increasingly families are either setting up their own family offices or are looking for professional, independent multi family offices that can work for them and are truly independent and conflict-free in their advice, something which can only come if they are an independent boutique with no product manufacturing and selling associated. A family office or a multi family office, as the case may be, provides the family with assistance not only regarding traditional investments but also in areas such as passion investments, private equity opportunities and philanthropy management, succession planning etc. These avenues also happen to be a part of the latest trends in UHNW investing.

The largest piece of this pie, however, comprises traditional investments. While equities and fixed income investments form the core part of the portfolio, asset classes such as commodities, real estate, private equity and passion investments form the alternative part of the family portfolio. The exact asset allocation is dependant upon individual preferences and risk tolerance and may vary from family to family.

As stated earlier, traditional asset classes such as fixed income and equities form the bulk of the investment corpus for the family. Protection of the investment corpus is of paramount importance to the families and is always a factor in deciding upon the asset allocation. Along with traditional investments however an increasing number of wealthy individuals have been showing a preference for passion investments. Such investments are often made with a dual purpose: that of making a return and being involved in an activity of interest and liking. Luxury collectables such as automobiles, jets, yachts, fine art, jewellery, gems and watches, wine, antiques, and rare coins and stamps are some pertinent examples of passion investments. In India though the recent trend shows a preference for jewellery, gems and watches, followed by art and luxury collectables as passion investments over the past couple of years.

While traditional investments offer diverse "off the shelf" options, ultra high net worth families are often keen to invest in bespoke private investment opportunities. Such opportunities involve a higher risk and consequently the potential for higher returns. Families are looking at areas like education, investing in low-cost housing, entertainment, alternative energy and hospitality in the private equity space in India. This trend of investing in direct private equity opportunities has caught up with ultra high net worth families and individuals in India over the last couple of years. These investors have been showing keen interest in such investments if the opportunities are in businesses that interest them. Being involved in contributing their financial as well as intellectual capital is what drives their interest in investing is some of these opportunities.

The biggest trend in UHNW individuals' portfolios lately is philanthropy. The need to give back to society, express gratitude towards the community, and to be of service to people is paramount amongst many ultra high net worth families and individuals who have reached a certain financial and societal position in life. Philanthropy as a field is still maturing in India and till recently was a much un-organised field. However, given the number of high net worth families and their need to allocate money towards charitable causes, this field has increasingly started becoming more organised. Another growing trend regarding philanthropy is that the families do not just wish to donate the funds but also wish to be involved in other ways, which could entail physical presence and active involvement in projects and ventures being funded. Families are also keen to see the results of the charity done by way of the difference it has made to the lives of those intended to be served.

These trends in UHNW individual investing have created opportunities for specialists in the respective fields and should augur well for the wealth management industry in India in times to come.