asset allocation: investments on the private market represent 18 pc of the asset allocation of family offices, UHNI in 2021

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Private market investments remain the alternative investment of choice with allocations to startups and venture capital funds accounting for 18% of the overall pie of family offices and high net worth individuals in 2021, according to a report. According to the Private Market Monitor, the changing face of the startup ecosystem with the wave of IPOs and acquisitions has created a new category of First Generation High Net Worth Individuals (UHNIs) who are proactively exploring the path of family office to manage their wealth.

The Private Market Monitor is a survey of over 100 family offices and UHNIs launched by trica in partnership with AZB & Partners and EY.

According to the report, there is a growing importance of investments in startups. “Private market investments remain the alternative investment of choice with allocations to startups and venture capital (VC) funds accounting for 18% of the overall pie,” he said.

This is quite aggressive compared to a 15% allocation to other alternatives (real estate, infrastructure, art, etc.), 20% allocated to fixed income securities and 36% to listed stocks.

Additionally, more than 83% of family offices have a private markets allocation that represents more than 10% of their overall asset allocation; and this number has steadily increased over the past five years for 50% of respondents and doubled for 40% of participants.

The main factors valued by investors for making direct investments in the startup were the quality of senior management, high-growth market opportunities, and the presence of a strong market moat.

Around 50% of family offices surveyed preferred the seed stage over the Series A stage to enter a seed investment, 40% preferred late deals over pre-IPO deals while 25% said they would prefer having a portfolio well distributed through the stages.

Fintech (82%) and enterprise technology (71%) were the top two sectors of choice, followed by other sectors such as consumer technology (68%), healthcare (50%), agritech (35%). percent), edtech (42 percent).

“The rapid expansion of UHNIs and family offices in India, coupled with the positive exit scenario from startup investments over the past year, has led to a growing appetite among investors to more actively manage their private market portfolios” , Nimesh Kampani, co-founder and CEO of trica said.

trica is a LetsVenture company that creates software products for stock management and trading.

LetsVenture, founded in 2013, is a startup investment platform with over 7,000 angel investors, a portfolio worth over $3 billion and an Angel AIF (alternative investment fund) with assets under management over $64 million.

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