Waterfield Advisors eyes $5-bn assets under advisory by 2019

Waterfield Advisors, a boutique firm that advises family offices and ultra high net worth (UHNW) families on preservation and creation of wealth and succession planning, is all set to cross the $2-billion mark in assets under advisory by March this year.

Founded by Soumya Rajan, a former Standard Chartered executive, the firm is all set to achieve $5-billion assets under advisory by FY19.

"Since we started our operations in 2011, the family office concept has matured in India. The conversations that we have now are much more engaged. We have seen our advisory build up at present to $1.4 billion. And, we will touch $5 billion by 2019," said Rajan.

The family office space is characterised by three emerging global trends - a growing number of high net worth and UHNW clients around the world, especially in the Asia-Pacific region; more affluent families seeking out experienced professionals to manage their wealth to fit their specific financial goals and risk tolerances; and ultra affluent clients demanding professional and customised financial services.

Globally, it is estimated that there are 4,000-5,000 family offices of which only three-five per cent are housed in Asia-Pacific, suggesting a significant growth potential for the family office format of wealth management services in the region. The Credit Suisse Global Wealth Report 2015 estimates the number of UHNW families in India at 2,100.

Rajan believes the need for setting up family offices in India is a necessity. "Almost $128 billion worth of wealth will be migrating from one generation to another in India over the next 10 years. And, we believe succession planning and how the wealth is preserved will be crucial."

Rajan is expanding the presence of Waterfield, which received strategic investment by Amit and Arihant Patni in 2014, to Mumbai, Delhi, Chennai and Bengaluru. "We'll soon have clients in Hyderabad and Kolkata," she added.

Changing trends
Since the launch of Waterfield, Rajan's client profile has moved towards UHNW families that have wealth in surplus of $50 million. "We have actually seen we can attract and work with the $50-million asset group. Our ambition is to try and cater to the top 200 families," she said. At present, Waterfield Advisors works with 30 families in India.

Over the past six years, Rajan says the way UHNW families are looking at the family office concept has changed. "The biggest change we have seen is the interaction with second generation. We have actually found the second generation to be our biggest supporters, because they want to spend more time on their operating business or their new businesses and don't want to be in the hassle of managing family wealth or charity," added Rajan. The second generation is typically in the age bracket of 35-40-years and thanks to their foreign education and interaction with their counterparts in other geographies, realises the need for professional management.

From an investment perspective, the Indian UNHW has also gone through some changes. While they want to continue to preserve and grow the wealth, many are also becoming more risk-averse when it comes to investment strategy. "One of the clear priorities is to balance their investment. But, the risk appetite of families is also going up. Two years ago, allocation of wealth in risk options was around five per cent, which has now moved up to 15 per cent," said Rajan.

She added real estate as an asset for investment has also come down. The second priority continues to be governance, with succession planning being the core concern.

"What has changed here is the framework or structure that family offices are putting into place for investments, risk management etc. This is common among pension funds or other funds," she noted.