Other BriefingsIndia Family Offices: A New Investment Force in Private Markets
India’s family office landscape is undergoing a period of significant change, with business families transitioning from informal wealth management practices to more structured and professionally managed investment vehicles. A family office is a specialized entity that manages the wealth, investments, governance, and succession needs of a family. These structures can range from traditional single-family offices that oversee only one family’s assets to multi-family offices that provide shared advisory and investment services to several families.
Indian family offices have significantly grown over the past decade, ranging from about 45 family offices in 2018 to nearly 300 in 2025. This expansion is indicative of broader trends in wealth creation, new liquidity events among first-generation entrepreneurs, and an increasing appetite for diversified investment strategies. Many families are now formalizing their investment operations through dedicated teams, defined governance processes, and clearer mandates, marking a significant shift towards institutional-style management.
A notable development is the increasing involvement of Indian family offices in private market transactions. Rather than focusing solely on conventional asset classes such as listed equity, fixed income, or real estate, family offices are participating more actively in private equity, venture capital, and direct investment opportunities. Just as well, many Indian family offices invest proprietary capital through selective private equity and venture capital allocations, often favoring longer-term investment horizons and targeted participation in specific growth sectors.
As India experiences rising ultra-high-net-worth (HNW) wealth and more frequent liquidity events, family offices are poised to assume a more prominent role in the country’s capital markets by 2026. Their professionalization, expanding investment capacity, and growing interest in private market opportunities suggest that they will continue to shape the landscape for both domestic and foreign investors in the coming years.
From passive wealth managers to private equity-style investors
Indian family offices are progressively shifting their investment approach from passive portfolios to more active, private equity-style strategies. Historically, the majority of family office assets were concentrated in real estate, listed equity, and fixed income, often managed within a conservative, capital-preservation framework. Recent studies have revealed a significant shift in the investment strategies of family offices. These entities are allocating an increasing portion of their portfolios to private equity and venture capital, along with other alternative assets.
Many Indian family offices have increased their investment in private equity and venture capital to over 10 percent of their assets, with some allocating more than 20 percent. This signals a willingness to take higher risk in pursuit of long-term growth. These allocations are often part of larger “growth asset” categories that also include private credit and structured products. This evolution is closely linked to the development of India’s broader startup and private capital ecosystem. India is now recognized as the world’s third-largest startup ecosystem, with government data recording over 150,000 recognized startups and more than 100 unicorns. In 2024, India’s venture capital ecosystem demonstrated a notable recovery, with investments reaching US$13.7 billion, representing a 40 percent year-over-year increase, underscoring its escalating significance as a focal point for technology and innovation-driven investments.
Family office capital is particularly visible in technology, consumer internet, healthcare, clean energy, and manufacturing-linked opportunities. Promoters often have sector experience in these areas. Family offices typically invest proprietary capital and often adopt longer-term investment horizons, allowing greater flexibility in holding periods compared with traditional fund-based investment models.
Strengthening governance, succession, and sustainability priorities
Indian family offices are evolving into structured platforms for governance and succession planning, in addition to investment management. Many are implementing clearer rules on ownership, decision-making, and conflict resolution through family constitutions, private trusts, and formal investment committees. These committees separate day-to-day portfolio decisions from wider family governance. These tools assist in establishing the roles of various family members and delineating the process for making key decisions over time, including in circumstances such as leadership transitions or disputes.
A significant factor contributing to this change is the scale of intergenerational wealth transfer currently taking place. As larger business families and first-generation entrepreneurs plan for succession, they are moving from informal arrangements to documented structures that organize how wealth, voting rights, and responsibilities are passed on. In many cases, the family office coordinates these arrangements across operating businesses, holding entities, and philanthropic vehicles, making governance a continuous process rather than a one-time event.
Next-generation family members are also influencing how governance frameworks are applied in practice. They place more emphasis on themes such as environmental, social, and governance (ESG) considerations and impact-oriented strategies. They often seek clearer alignment between the portfolio and the family’s long-term values. Consequently, investment guidelines are increasingly incorporating sustainability priorities, sector preferences, and exclusions alongside financial objectives.
In general, the governance of Indian family offices is shifting towards more formal, documented, and professional models, while still allowing for family preferences and legacy goals to influence the long-term deployment of capital.
Evolving regulatory and structuring options for family offices
Indian family offices currently utilize a combination of private companies, limited liability partnerships (LLPs), and holding entities to execute and consolidate domestic investments. Alongside these traditional structures, there is growing use of Securities and Exchange Board of India (SEBI)-regulated Alternative Investment Funds (AIFs) to manage more diversified and professionally governed portfolios, especially where families want a pooled vehicle with clear investment policies and third-party managers.
For cross-border and global allocations, the Gujarat International Finance Tec-City International Financial Services Centre (GIFT IFSC) enables families to establish a Family Investment Fund (FIF) framework under the International Financial Services Centres Authority (IFSCA) Fund Management Regulations. A FIF is a self-managed fund that pools money only from a single family and may be constituted in the IFSC as a company, contributory trust, LLPs, or other forms permitted by the authority. Depending on the structure and eligibility, using the IFSC framework may offer families a formal vehicle for managing global portfolios while accessing regulatory features and potential tax incentives available to eligible IFSC fund structures.
In this context, it is essential to differentiate between unregulated family offices, which primarily manage their own proprietary capital, and regulated investment vehicles such as AIFs or FIFs, which are subject to compliance with securities and fund-management regulations. Cross-border structures must also adhere to India’s Overseas Investment Framework and Foreign Direct Investment (FDI) rules, including the Foreign Exchange Management (Overseas Investment) Rules, 2022, and related guidelines issued by the Reserve Bank of India.
At the same time, SEBI has explicitly clarified that it is not currently examining or pursuing a separate regulatory framework for family offices.
How family offices are reshaping India’s private markets
Family offices are reshaping India’s private markets through wider participation across deal stages and a growing role as domestic capital providers. They are becoming more active in early-stage rounds, particularly in technology and consumer-facing startups. They are also expanding into growth-stage and pre-Initial Public Offering (IPO) transactions alongside private equity and late-stage venture capital funds. Instead of pursuing a broad, index-like investment strategy, many family offices adopt a more selective approach, focusing on a select number of high-conviction deals. When appropriate, they also negotiate investor protections and governance rights.
Concurrently, family offices are contributing to a more stable domestic capital pool during periods of global market volatility. Their strategic allocations can help bridge funding gaps when foreign venture capital and private equity inflows slow, supporting continuity for startups and other unlisted companies through follow-on rounds and structured primary investments, and, in some cases, through secondary transactions.
Another defining feature is strategic, sector-focused investing. Many families deploy capital in areas where they have operating experience, such as technology-enabled services, consumer internet, healthcare, manufacturing, infrastructure, and clean energy. This approach not only provides funding but also access to industry networks and operational insight.
Co-investment structures are becoming more common, with family offices partnering with domestic and global fund managers for deal sourcing, due diligence, and post-investment governance. Collectively, these developments are broadening India’s private capital base, diversifying funding sources for entrepreneurs, and strengthening private market depth over the medium term.
Outlook for 2026: Opportunities and risks for investors
Looking ahead to 2026, Indian family offices are expected to gain further prominence in the country’s private capital ecosystem, creating both new opportunities and important considerations for market participants.
On the opportunity side, the continued expansion of ultra-high-net-worth wealth in India is likely to support the formation of additional family offices and the scaling-up of existing platforms. It is anticipated that an increasing number of promoters and first-generation entrepreneurs will channel liquidity from business sales and capital-market events into dedicated family office structures. At the same time, there is a growing shift towards formal investment vehicles such as SEBI regulated Alternative Investment Funds, while the Family Investment Fund framework introduced by the International Financial Services Centres Authority at the Gujarat International Finance Tec-City International Financial Services Centre is emerging as an option for more diversified and sophisticated global portfolios. This development is enabling the implementation of more sophisticated cross-border investment strategies. Recent analysis indicates that high-net-worth families are increasingly participating in impact investing, although engagement remains uneven. Between 2021 and 2024, 923 HNW families made impact investments, but activity was concentrated at the seed stage, with limited retention and comparatively lower participation in mid-stage financing.
However, there are several considerations to take into account. The lack of a dedicated regulatory framework specifically tailored to family offices can create operational ambiguity, particularly where investment activity begins to resemble that of institutional funds. Compliance requirements for cross-border structures, including those governed by FDI and Overseas Direct Investment (ODI) rules, can be intricate and may necessitate specialized advisory support. Concurrently, governance challenges may escalate as family offices expand in size, incorporate external professionals, and strike a balance between family oversight and independent decision-making.
Overall, 2026 is likely to bring wider family office participation in private equity and venture capital transactions, more structured co-investment partnerships with global and domestic funds, and a strengthening role for family offices as long-term capital providers in India’s private markets.
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