The second edition of the Indian Family Business Awards 2022 by Moneycontrol in association with Waterfield Advisors and Grant Thornton saw an interesting panel discussion of succession planning in family-owned businesses, which was moderated by Ashwin Mohan, Editor (Deals), Moneycontrol.
Highlighting more women taking up leadership roles, Soumya Rajan, Founder and CEO of Waterfield Advisors, said that more women are taking up leadership positions in the last generation due to better education and even qualifications and a growing pool of quality leadership.
“We see that 38 percent of the Indian family businesses are run by women. Sometimes you need the right examples to pave the way for other women to step in and take charge,” she added.
Catch all the updates on the Indian Family Business Awards 2022 here
Talking about succession plans of family businesses, Pallavi J Bakhru, Partner and Leader - Private Client Services, Grant Thornton Bharat said that family governance charters act as a reference point for generations even during crises.
“I am very bullish on family governance charters,” she said. She also cited the example of the GMR Group, which has a family governance charter.
Highlighting an increasing role of hiring professional help from outside to manage the wealth, Soumya said that more families have started hiring CFOs to take care of their wealth along with their businesses.
"The skill set needed for top executives in the family business has gone beyond the role of accountants. We see family businesses seeking people with experience in consultancy, academics etc. It helps them bridge the gap between the family and the business," said Rishabh Shroff, Managing Partner, Cyril Amarchand Mangaldas.
Throwing light on the investment pattern of Indian family businesses, Shroff said overseas investment is welcomed by family businesses.
“Family businesses are investing in Dubai, Singapore and GIFT City. Foreign countries prefer Indian investment rather than investment coming from China,” he said.
Speaking about investments from such families she said that there is a trend of family businesses increasing investments in private markets. “The average investment of family businesses in private markets has risen from 1 percent in 2011 to around 12 percent now,” Soumya said. “A number of family businesses now also opt to have an office outside India because it gives much more exposure - be it about sustainability or long-term wealth."
The discussion also shed light on the country’s first International Financial Services Center (IFSC) - GIFT City, which allows family offices to establish a first-of-its-kind fund management entity, family investment fund (FIF) in GIFT City.
“The Family Investment Fund announced for GIFT City has garnered interest from family businesses,” said Soumya.
Pallavi said, “There haven’t been any approvals for investment in the Family Business Investment Fund for GIFT City. Once a few investment opportunities are cleared for the Family Investment Fund we will see a rush of money flowing.”
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