Over
the years, have you observed any discernible behavioural differences in the way
UHNI’s approach their investments/portfolios?
UHNIs are more diligent in
allocating funds and are more informed. Transparency in fees and charges is
expected and Investors are more cost-conscious. The investment decision-making
process for UHNI investors has become more sophisticated, and asset allocation
is of prime importance.
How would you describe the attitude of the majority of UHNI’s
towards risk-taking?
Trends indicate a shift of
portfolio exposure towards alternative investments. Direct venture capital
investments and absolute return strategies among the most popular investments
in UHNIs and Family Offices. Calculated risk-taking and tactical allocations
can be seen in portfolios.
How inclined/disinclined are UHNI’s towards plain vanilla products
such as Mutual Funds? Are they more inclined towards investing directly into
stocks?
Core portfolio allocations
consist of both Mutual Funds and Direct Stock and Bond Investments. Both
approaches go hand in hand and are equally focussed in UHNI portfolios.
Broadly speaking, how do UHNI’s approach their real estate
investment portfolios? Do they prefer to buy land or to invest through vehicles
such as REITs?
Commercial properties and
commercial asset funds are popular. Direct investment depends on the ticket
size of the property. Land purchases are still done directly as it has a heavy
home city bias.
In your observation, how inclined as UHNI’s towards making angel
investments/growth capital investments in start-ups/ VC investments? Do they
generally prefer to do these directly or through a fund?
Initially, these investments
were done via VC funds as direct access to such deals was limited. Over the
last two years, we have seen a surge in direct deals by Family Offices and UHNI
investors. This indicates that the Indian VC industry is maturing at a fast
pace. The reason behind this is first, investors do not want to shell out fund
management expenses and profit-sharing, secondly, they wish to be a part of the
management and decision making in these start-ups providing their network and
expertise, and thirdly, they might have synergies with the investee companies
for their running business and are looking at these companies as probable
takeovers in the future.
How would you describe the attitude of most of your UHNI clients
to philanthropic endeavours? Do you believe that a specific vehicle to this
effect, would be of interest to UHNI’s?
UHNIs usually make
philanthropic contributions through their own charitable trust or foundations.
They usually dedicate efforts to a cause which may be personal in nature or
related to their profession/business which gives them a deep understanding of
the issue and makes them better equipped to tackle it.
What product gaps need to be filled in the Indian market for
UHNI’s, compared to more evolved global markets such as the U.S &
Europe?
Venture Capital/Private Equity
investments still a minuscule part of the overall portfolio. More sophisticated
products on the fixed income side are yet to enter India. Alternative
investment exposures would grow significantly in the coming years.
Do you find resistance within the “old money” UHNI’s towards more
complex investment products such as structures? Are they generally more
inclined towards traditional avenues such as Bank Deposits?
The old money has also evolved
with changing trends and we see these investors opting for better tax-effective
avenues for investments. Though we still see higher exposure to bank fixed
deposits and bonds than structured products.
No comments:
Post a Comment