Waterfield Advisors set to raise $250 million fund-of-funds, eyes global expansion

Waterfield Advisors, the country’s largest multi-family office and wealth advisory firm, is raising a $250 million fund-of-funds, its Founder & CEO Soumya Rajan has said.

This firm is looking to do the first close of this fund in the next 4-6 weeks, Rajan said in an interview. Last year, this firm raised ₹ 550 crore in a maiden fund-of-funds structure.

A fund of funds (FoF) is an investment vehicle that holds shares in other funds rather than individual securities or private assets. This approach offers diversification and other benefits to investors in private equity funds.

• Read: Waterfield Advisors raises ₹200 crore in first close

GLOBAL PLAYER

Waterfield Advisors, set up in 2011, aims to become a global wealth management player and plans to set up an office in Dubai, which should be up and running in the first half of the 2024 calendar year, she added.

Already, Waterfield Advisors has a presence in Gujarat’s GIFT City, which the firm now wants to be a hub for operating all its global businesses.

Asked about the strategic intent behind a proposed plan to set up presence in Dubai, Rajan said, “We want to be able to serve our domestic clients on their offshore needs. Also we want to be right partner for global investors (including NRIs) looking at India. We want to be their eyes and ears. We have no conflict of interest, but alignment of interest with whom we engage with”, she noted.

• Read: Waterfield Advisors to offer advisory services in Kochi

After Dubai, Waterfield Advisors intends to expand its global footprint into newer markets such as Singapore and London. 

Over the past five years, there has been a significant surge in the establishment of family offices in India, with the current count exceeding 300, marking a remarkable growth rate of about 284% since 2018.

There were only 45 formal family office structures in the country in 2018 out of 5,300 globally.

Waterfield advices over 100 family offices in India and currently has financial assets under advice of over $ 4 billion. 

This firm also guides families on non-investment issues such as succession planning, corporate and family governance, business strategy, and philanthropy.

Of the 300 family offices in India, a substantial number have invested in over 200 startups since 2014, favouring seed-stage ventures within the fintech, e-commerce, and enterprise tech sectors over the past three years.

It is also expected that the family offices in India will account for 30% of the total $100 billion of startup funding by 2025.

Rajan also said that Waterfield wants to be a large domestic institutional investor, noting that the firm has deep connections with many funds in India.

She said the firm was working on two new segments —corporate professionals and women.

Unlike in the past, family offices are showing a lot of discipline now and evaluating deals carefully, she noted.

India vs Global scenario 

Interestingly, the thresholds at which family offices are getting set up in India are much smaller than the overseas dollar equivalent. It is $200 million (₹1,500 crore) outside India, while In India, the threshold is three times lower at about ₹ 500 crore.

Big Trends 

Commenting on the major trends sweeping the wealth management industry, Rajan said there is a perceptible shift towards passive investments, and one will see much more of it in India in the coming days.

She also said that global diversification as a trend would continue.

On private market investing, Rajan said this concept was here to stay, and domestic participation could increase. “What was a hobby earlier, there is lot more science now”, she said.

She also highlighted the ongoing trend of increased financialisation of assets, noting that it would double over the next five years.

The concept of accredited investors announced by SEBI is expected to take off in the coming days, Rajan added.

The wealth management industry in India is predominantly distribution-based, with close to 1.25 lakh distributors.

On the other hand, there are only about 1000 registered advisors. There is now the emergence of a growing class of registered investment advisors. 

“There is now more wholistic approach to wealth management across all levels. This is the case not only with the ultra-rich in India who are looking for solutions…it is now permeating to the mass affluent as well”, Rajan said.

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