In an interview with Mint, Ashish Shanker, managing director and chief executive officer, Motilal Oswal Private Wealth shares how these new-age millionaires invest and approach wealth differently compared with legacy HNIs or family offices.
How are new-age entrepreneurs approaching wealth creation differently from legacy HNIs?
We’re seeing the rise of a much younger set of millionaires and even billionaires in India as the startup ecosystem matures. These are founders who built companies over 10–15 years, raised venture capital, scaled aggressively and are now monetizing, either through IPOs or stake sales.
A key difference is their age and their risk appetite.
Because they’ve created wealth by taking bold risks, they remain comfortable with risk even after a liquidity event, unlike the legacy HNIs who get a little conservative once they have taken money off the table. At the same time, they are far more organised. Once the money comes in, they sit with wealth managers to plan everything — how to structure holdings, governance rules and capital allocation.
They also have a strong sense of gratitude to the ecosystem that enabled their success. This combined with their risk taking appetite, they reinvest heavily in private markets—backing other founders, becoming limited partners (LPs) in venture funds that supported them and investing in sectors they understand. And because many didn’t previously indulge in lifestyle spending, part of the liquidity also goes into buying a big house and personal assets.
What share of their portfolios typically goes into private investments?
The range is wide. In some extreme cases, 50–60% of their wealth goes back into private markets because they’re deeply networked there. They know the funds and founders, they understand the ecosystem, and they often become LPs in the same funds that backed them.
On the lower end, it can be 20–30%. But even that is far more aggressive than traditional family offices, where our guidance is usually to keep alternatives within 20–25%.
What investment horizons are they comfortable with?
They’ve lived the founder journey themselves, so they know exits can take 5, 10 or even 15 years. They’re willing to allocate to companies that may be three to four years from an IPO as well as early-stage startups where the journey could be a decade long. Long lock-ins don’t faze them because they’ve experienced them firsthand.
What return expectations do they have from private investments?
Naturally higher than public markets, because they’ve experienced very high internal rate of returns (IRRs) in their own businesses. But they also understand that returns in the private markets aren’t linear. You may get nothing for years and then one monetization event can change the portfolio’s IRR completely.
If public markets deliver around 15%, private market expectations can be 20–25% or more. But they do understand that outcomes can be patchy.
How does this compare with legacy HNIs or family offices?
Legacy wealth tends to be more conservative. Second- and third-generation families think in terms of preservation. They create buckets and typically 20-30% is for alternatives. They prefer opportunities closer to maturity, say pre-IPO or companies likely to list in three to five years. Early-stage allocations are usually much smaller.
Beyond private markets, where do they allocate capital?
The new-age entrepreneurs like to maintain a liquid bucket because they’ve lived through years without liquidity. This portion goes into public equities, through mutual funds, alternate investment funds (AIFs) or direct stocks.
Some portion of the bucket they keep in conservative fixed-income avenues, like high-yield debt, which can provide both cash flow and capital preservation; sometimes private structured debt as well.
However, this is after they have spent on some lifestyle upgrades, like buying marquee real estate. The idea is to keep part of the portfolio flexible while the rest compounds.
Is liquidity the key driver behind these allocations?
Liquidity is the main driver. But if you’re investing in equities, there is an expectation of moderate returns. Still, we advise them to moderate expectations to 13–15%. We advise them that the post-COVID rally cannot be replicated easily.
Are they keen on global diversification?
Very much.
They’ve travelled, met global investors and seen global markets firsthand. Many want dollar exposure for currency diversification. They generally don’t hedge because the idea is to keep some assets in hard currency.
Liberalised Remittance Scheme (LRS) limits are a constraint, but they are increasingly exploring GIFT City structures, where up to 50% of net worth can be deployed.
They are also open to global private markets, especially in emerging areas like AI, often through networks built by their own foreign investors.
Do they also keep liquidity for a second entrepreneurial inning?
Yes.
Founders who exit young often return to entrepreneurship after their lock-in ends. Others who partially exit remain focused on scaling their existing businesses. But keeping some liquidity for future business ideas is very common.
What sets the first-generation wealthy apart?
They understand risk very well because they’ve lived through difficult periods of funding challenges, near-death phases, delays in IPOs. So private investments feel natural to them.
Where they need more handholding is in public markets and fixed income, where mark-to-market volatility is daily.
We guide them to enter gradually and help them understand why diversification into gold, fixed income, global allocation etc is important. Familiarity drives comfort, and they’re most familiar with the startup ecosystem.
Do liquidity events like IPOs create unique challenges?
Yes. Before the event, the biggest conversations are around structuring—taxation, whether to set up trusts, how to allocate shares within the family (as per different family member’s aspirations), and long-term aspirations of the founders themselves, like philanthropy.
Day-zero planning is equally important in the process. The moment funds hit the account, we have to ensure the money goes into liquid instruments so there’s no idle money or leakage. Allocation to long-term strategies happens progressively.
Are founders emotionally attached to their own stock?
One hundred percent.
They don’t view their own shares like an investment—they view them like a home. They’re permanent owners in their minds. But this is true for all first-generation businessmen, and not just new-age startup founders.
Some do take chips off the table through block deals, which we facilitate. Others buy back stock during depressed phases. But the emotional connection is very strong.
How has this changed the way wealth managers operate?
It has pushed us to deepen our capabilities significantly. We’ve expanded our private market platform, worked closely with our promoter family office to offer co-investment opportunities, and strengthened research across the startup maturity chain—from Series A to pre-IPO.
We’ve applied for our own Category II AIF licence to build fund-of-fund and co-investment sleeves. We also invest heavily in training our wealth managers on how to work with founders—especially before a monetization event. In many cases, we’ve funded their companies ourselves, so the relationship starts years before an IPO.
Overall, we’ve become more solution-oriented, more consultative and more deeply embedded in the startup ecosystem.