Uday Kotak Advises Family Office Heirs to Pursue Entrepreneurship, Not Just Wealth Management

Uday Kotak, founder of Kotak Mahindra Bank, has urged the next generation of business heirs to step into building real-world businesses. Speaking at the Kotak Institutional Equities’ investor conference on Thursday, Kotak flagged concerns regarding the increasing inclination of young business heirs to run family offices and investments instead of starting businesses of their own. 

“Even today, I firmly believe that the next generation must work hard and create businesses rather than becoming financial investors too early,” said Uday Kotak, according to the Economic Times. Instead of running family offices, they should be starting real-world businesses from scratch, he added. 

He highlighted that the trend of managing family offices, investing in the stock market, and allocating funds to mutual funds has gained momentum post Covid-19 particularly by those coming from business families. He mentioned the shift is due to declining “animal spirits” amongst the successors, especially individuals at 35 and above. 

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Are Family Offices Surge Driving Next-Gen? 

His statement comes at a time family offices are flourishing not just in India but worldwide. According to a report by Deloitte titled Defining the Family Office Landscape, family offices have increased 31% from 6,130 in 2019 to 8,030 in 2024. The study projects that it is likely to witness a 75% increase to 10,720 by 2030 driven by rising wealth concentration, strong private equity and mergers & acquisitions markets. 

“Family offices’ surge in popularity is driven by a combination of factors, including increased wealth concentration, successful transfers of generational wealth, robust private equity and mergers & acquisitions markets, and the pursuit of more customised investment strategies and services,” the report stated. 

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Another report by J.P Morgan, ‘2024 Global Family Office Report’ highlighted that the increasing geopolitical instability and rising complex economic and investment landscape have increased the relevance of family offices as more affluent families are eyeing stable and long-run financial returns.