In an exclusive interaction with Adlin Pertishya Jebaraj, correspondent of Finance Outlook India, Dhruv Chopra, Managing Partner at Dewan P N Chopra & Co and Managing Director of DPNC Advisors Pvt Ltd, shares his insights on redefining wealth management for Ultra High Net Worth families in India through the Multi-Family Office model. He highlights the structured approaches to asset allocation that balance risk, return, and liquidity across multiple generations, the implementation of risk-adjusted return frameworks and performance measurement models, and the strategic use of financial leverage in investment strategies. Leading a firm with over 80 years of legacy and having completed over 80 transactions across sectors while managing USD 350 million in assets under advisory, he offers a roadmap for how Indian MFOs are transitioning from transaction-driven models to advisory-first, relationship-led partnerships that serve as strategic enablers of multi-generational wealth preservation and creation in an evolving financial landscape.
How do MFOs in India structure asset allocation for UHNW families to balance risk, return, and liquidity across multiple generations?
MFOs today follow a more institutional and process-driven approach to asset allocation. The starting point is an Investment Policy Statement (IPS), a guiding document that defines the family's long-term objectives, investment philosophy, target returns, and acceptable risk levels. The IPS is reviewed periodically, usually once a year, to reflect changing market conditions, asset-class risks, or new investment opportunities. Reviews are driven by changes in asset-class risk profiles, the emergence of new opportunities, and shifts in macroeconomic or geopolitical conditions. This ensures that portfolios remain dynamic and aligned with both family goals and macroeconomic realities. A family's risk appetite is closely linked to how its core business is performing. When the business does well, families tend to take on higher risk and invest in long-term or illiquid assets. In weaker cycles, allocations shift toward liquidity and preservation.
Generally a 3-step timeline based approach is used wherein the investment plans are segmented into Liquidity (0–3 yrs spend), Growth (3–10 yrs wealth accretion), and Legacy (10+ yrs). The planning around these timelines considering risk tolerance across assets classes and within the legal parlance help the process evolve naturally across generations.The next generation's ability to take risks depends on the financial strength left by the previous one. The IPS provides continuity and discipline, helping families take long-term, goal-oriented investment decisions. It ensures that portfolios remain resilient while balancing growth, liquidity, and preservation and help in wealth creation across economic cycles and generations.
In essence, asset allocation for UHNW families is goal-based, dynamic, and deeply contextual—balancing near-term liquidity with long-term compounding and inter-generational continuity.
How do MFOs implement risk-adjusted return frameworks, and what financial models are typically used for performance measurement?
MFOs generally evaluate performance through a portfolio-level lens rather than asset by asset. The focus is on how the entire portfolio performs relative to the overall weighted risks undertaken compared to its chosen benchmarks. Performance measurement is largely benchmark-based, where portfolios are compared to appropriate indices or peer sets. It is important to separate manager skill from market exposure by using factor and style attribution across beta, size, value, quality, and momentum. An evaluation tool like attribution analysis is used to identify sources of excess returns from a firm or fund manager's active investment decisions. For private markets, it is imperative to evaluate results using IRR, DPI, and TVPI together with Public Market Equivalents or available benchmarks. MFOs blend quantitative and judgment-based evaluation to ensure consistent, risk-conscious performance across asset classes and market cycles.
How is financial leverage used within MFO investment strategies to enhance portfolio returns without increasing undue risk?
In India, leverage is used selectively by MFOs and primarily in situations where the risk-return spread is clear and predictable. While leverage can enhance returns, it inherently adds risk, and families tend to be cautious about using it. In global markets, lenders such as private banks often extend low-cost credit to family offices to invest in yield-bearing assets, creating positive spread opportunities.
However, in India, the cost of borrowing is typically high, often reducing the effectiveness of such strategies. Therefore, MFOs in India tend to use leverage primarily for structured investments or strategic equity stakes, where asset performance is relatively predictable, real estate or long-term strategic acquisitions, where credit is secured against the asset itself, ring-fencing family liquidity, and tactical opportunities in fixed income, where temporary arbitrage between debt cost and return justifies leverage.
Conversely, using leverage for public market equity exposure remains limited among Indian UHNW families due to higher risk of volatility in share price. Most family offices prefer discipline and long-term compounding over leveraged alpha generation.
In short, in our experience, leverage is viewed not as a tool for speculative gain but as a strategic instrument, deployed only when risk-adjusted visibility of returns is high and substantial liquidity is available within the family.
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How do MFOs ensure profitability while maintaining alignment of interests with UHNW families?
The MFO model in India is still nascent and evolving, and the business model should inherently prioritizes alignment over scale. Unlike wealth management, which is often transaction-driven, MFOs operate on an advisory-first, relationship-led model that prioritises client interests. Balancing profitability with client alignment remains a key challenge and is therefore derived from depth of engagement and the breadth of services by offering a comprehensive suite of services, including investment advisory, estate and succession planning, governance design, transaction advisory, and alternative asset allocation.
The relationship is long-term and built on trust, credibility, and consistent delivery across multiple service lines.In India, both MFOs and family clients are evolving simultaneously as many families are setting up professional offices for the first time and are garnering experiences along the way.
Given the nascent stage of India’s MFO ecosystem, most players adopt a hybrid model combining fixed advisory retainers with performance-linked success fees. Over time, one hopes profitability emerges through long-term relationships as trusted advisors for investments and transactions.
How do you see the revenue and fee structures of MFOs evolving in the next 5–10 years to balance profitability, client alignment, and the increasing complexity of financial advisory services?
Globally, the MFO model has evolved toward transparent, fee-based advisory structures, and Indian MFOs are moving in the same direction. As families mature in their understanding of financial services, they are becoming more willing to pay for value rather than distribution.
We also feel that as UHNW families expand in size and complexity, the demand for professional, holistic, and transparent advisory models will continue to rise and Indian MFOs are likely to transition from AUM-based or transactional fee models to fixed retainer plus performance-linked structures.
The next decade should witness MFOs in India evolve from being perceived as “cost centres” to being recognised as strategic partners in multi-generational wealth preservation and creation. Accordingly, MFOS are expected to achieve profitability through deeper engagement across multiples aspects of service offerings.
