MONEY
By Gautami Gavankar “We don’t have to be smarter than the rest. We have to be more disciplined than the rest.” Warren Buffett’s fundamental rule for investing in known or emerging avenues resonates strongly with the next generation (next-gen) of Ultra High Net Worth Individuals (UHNIs) in India . These young titans of wealth are not just following their predecessors’ example but are charting new territories in investment diversification. This new cohort of UHNIs is redefining the investment landscape with a blend of traditional wisdom and modern sensibilities. They are not just scouting for alternative investment avenues; they are actively shaping them. They have started at looking at value investing and have understood that they must value the business in order to value the stock; which are principles followed like stalwarts like Warren Buffett. From impact investing and sustainable technologies to digital assets, their portfolios reflect a keen understanding of global trends and a commitment to long-term value creation. Going by some of their recent interests and initiatives, these next-gen UHNIs are investing with a disciplined yet innovative approach. They are learning from historical growth curves while simultaneously embracing cutting-edge opportunities. Their investment agenda now extends beyond mere wealth accumulation to include nurturing potential unicorns, prioritizing social values, and championing environmental sustainability. Also Read: Digital Arrest Fraud: How scammers use fear to steal your money Alternatives abundant on the horizon : Family offices and wealthy individuals are showing increasing interest in private markets, an asset class that historically has been largely inaccessible to non-institutional investors. Over the past two decades, we have seen some incredible businesses globally enjoy huge success while remaining privately held, think Facebook, Uber or Airbnb. Back home, the next generation has come of age seeing private markets as an incredibly exciting opportunity. The private market investing landscape in India has evolved into a wide array of private market funds covering the full spectrum of access to investment opportunities across stages and sectors of business development. Further, exit opportunities which hereto used to be far and few has been graduating to an active stream of exit avenues such as initial public offerings (IPOs), secondary sales and strategic acquisitions. Both these factors have contributed to making private market investing for the next-gen more enticing by providing liquidity and attractive return potential as well. Like all investors, next-gen HNIs, too, are on the constant look out for investment options that would give manifold returns in quick time. Right now, the idea is to identify them early and get a head start. Investments in alternate assets continue to elicit the interest of the next-gen investors as they go beyond the traditional ways of exotic investments like real estate including REITS and luxury collectibles. With the Reserve Bank of India allowing residents to invest up to $2,50,000 every financial year, globally, under the Liberalised Remittance Scheme (LRS), this new generation high net worth individuals are diversifying their portfolios, keenly watching major trends that peers in advanced countries are exploring. There is very high interest from the next generation to invest in themes which are not accessible locally and where opportunities are multi decadal in nature. We are seeing a lot of interest in allocating to cutting-edge technology, Regenerative AI, Semiconductors, EV and many such themes of the future and diversifying across the globe. Opportunities to invest are also emerging with opening up of the Overseas Portfolio Investments (OPI) window from GIFT city and with many best in class fund managers setting up operations there. Impact investing shows the tender side: Socially conscious investment is on the rise around the world with Millennials and Gen Z leading the way through ‘impact investing’. Beyond aiming for financial gains and personal wealth accumulation, the upcoming generation of investors and established Family offices are looking at prioritizing investments that resonate with their values and passions. For them, it is not just financial returns; it is about creating cultural capital. Sustainability and impact investing are clear examples – As the nation continues to advance and modernize, the focus on ESG (Environmental, Social, and Governance) factors is anticipated to increase, serving as both a risk management tool and a way to seize new sustainable opportunities. India’s dynamic start up ecosystem plays a crucial role in this shift. Many start-ups in clean energy, waste management, and social enterprises are providing investment options that are both profitable and sustainable. Further, according to the recent Bain Dasra Philanthropy Report, both Now-Gen givers (first-generation wealth creators) and Inter-Gen givers (current generation of traditional family philanthropists) are showing a growing interest in supporting Gender, Equality, Diversity, and Inclusion (GEDI) initiatives, with 37% of their giving directed towards this cause, and 34% towards climate action. These next-gen givers are significantly reshaping philanthropy to address climate change and are leveraging their resources and networks to drive impactful climate solutions. In conclusion, the next-gen HNIs are slowly and steadily exerting a considerable influence on the Indian economic outlook with their passionate, motivated and responsible style of investment. As India aims to become the world’s third largest economy by 2027, these next-gen HNIs have a big role to play. (The author is the President , Kotak Mahindra Bank Ltd) Disclaimer: The views expressed are personal and do not reflect the official position or policy of FinancialExpress.com. Reproducing this content without permission is prohibited. None
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