India’s family offices want to invest in private equity, but it’s complicated
The number of family offices in India has grown nearly sevenfold in recent years, and they are increasingly looking for direct private equity investment. But there are barriers to overcome. (Patrick Doyle/AP)
Indian family offices are showing growing interest in co-investment. As the sector grows, India’s family offices are looking for the greater visibility and control that comes with direct private market exposure.
Between 2018 and 2024 the number of family offices in India increased from 45 to around 300.
Sraboni Harlalka, co-founder of investment bank Wodehouse Capital, said: “The reason for this increase is because family offices have diversified their investments, professionalised their operations, and focused more on succession planning and philanthropy.”
But while demand for direct opportunities in private markets is rising, there are barriers which prevent all but the largest from investing outside India.
Amit Patni, director at Raay Global Investments and Campden Family Connect, said many family offices are looking beyond traditional private equity and venture capital funds because such investments often provide limited visibility into where capital is deployed and can involve lengthy exit periods.
Raay Global Investments is Patni’s family office while Campden Family Connect is a membership network for business families and family offices.
Patni highlighted access as a key attraction of co-investments: “Sometimes you may not get access to deals. If one family office gets access to a deal and wants to share it, and you want to be part of it, that drives [interest].”
Furthermore, when a trusted family office conducts due diligence and commits capital, other investors can participate with greater confidence. "If a family office is leading an investment, then it has already taken care of the due diligence. You don't have to do it all over again,” he said.
Patni added: "If the family office has already put in money and is taking care of it, then you know that there is a family office that may be on the board of the [target] company and is monitoring the [investment] outcome. You can ride on that and do not need to get as involved, especially if you do not have that much time."
Co-investing challenges
Challenges in co-investing are inevitable, starting with the investment decision itself. "If a company is pre-revenue, and you don't know where the company is heading, decision-making becomes a struggle because sometimes you have to make a decision based on your gut," said Patni.
Founder risk is another significant concern. “How do you trust that the founder will take the company to the next level?” he asked.
Patni also identified valuation gaps as a common obstacle to deal progression.
But quantity is also a problem: according to KPMG India ranks third globally
with more than 100 unicorns (a private company valued at $1bn or more) and the number of start-ups has grown at a rate of 31 per cent a year.
This means investors must assess whether a company has the potential to scale in an increasingly competitive market: "There may already be five other companies doing the same thing. So you have to look at the uniqueness of the product."
As Indian private markets mature, governance has emerged as a crucial issue. "Nowadays, there are a lot of governance issues in private companies. Even very large companies have had governance issues," Patni noted.
Exits also present a hurdle. "As a family office investor, you may not have a say in the exit because you may not be the largest shareholder," Patni explained.
He also emphasised that "unlike developed markets like the US, where companies can become big in three years, in India it takes eight to 10 years".
Patni believes networks are increasingly vital for accessing opportunities and information. Within the Campden network members share ideas through conferences, workshops, and informal settings.
Members are currently investing across diverse sectors, including healthcare, real estate, food and nutrition, technology, and artificial intelligence.
"As a family office [ who is a Campden member], you get to meet people who are investing differently. Some are investing internationally."
Patni said that although his family office invests in public markets outside India, their private investments remain India-focused.
He cited the liberalised remittance scheme as a limitation to investing in private equity outside India, which allows all resident individuals in India to remit only up to $250,000 each financial year.
“Also, since we do not have the bandwidth to manage outside deals, unless we put up a large office outside, we keep focused on India for private deals.”
Meanwhile, he said that “some family offices that have a large corpus can afford” to set up offices abroad.
“There are a few families that have set up Singapore entities and are investing outside [India] in private deals.”
Consistency is key
According to a recent Mercer report by Sarah Gresty, Mark Sheahan, and Steven Keshishoghli, co-investments have become “one of the more talked-about topics in single family office circles”, but success depends less on selectivity and more on consistency.
The authors said the most effective family offices invest steadily across cycles, vintages and deal sizes, rather than timing activity around market conditions. They argue that this discipline not only improves risk diversification but also helps build stronger relationships with general partners, who value reliability over opportunism.
Some family offices within the Campden network have built private market expertise. "There are families in the Campden network who invest in 15 to 20 companies a year, so they have the bandwidth to know how to do the deals, what kind of due diligence is needed and how to monitor them," Patni said.
By contrast, family offices focused primarily on public markets or other asset classes often lack the resources to evaluate and manage a large number of private investments.
"They prefer to participate if another family is already investing and doing the groundwork and legwork," the director explained.
Looking ahead, Patni expects co-investments to become a much larger part of family office portfolios and believes participation will not only remain limited to large investors.
"There are families that don't have access [to deals] because they are small. There are [also wealthy] individual investors who want to participate in private investments. So I think it's going to happen more and more."