The Unique Investing Approach of Indian Family Office RNT Associates
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After 20 years of leading India’s largest family business, Tata Sons’ Ratan Naval Tata took a surprising step after retirement. He set up family office RNT Associates as a private investment vehicle to invest in startups emerging from across the nation.
Since 2012, Mumbai-based RNT has picked up stakes in over 40 startups. Some are now household names in India. RNT got in early with Ola and Paytm. Each are currently worth $7 billion and $10 billion, respectively, and count Berkshire Hathaway and Softbank as investors.
Speaking at the TiECON Mumbai Conference in 2016, Tata said he picked companies based on whether the business model excited him and was backed by a great team of founders. “I see it as a worthwhile experience, if the concept excites me. What do I feel of the founders? What is their first impression? Is he/she only in it for the short term? Does he/she have passion for the sector? I am a very numbers-driven person,” he said at the event.
In recent years, RNT has started looking beyond India for opportunities. It partnered with the University of California to launch the UC-RNT Fund in 2016. Earlier this year, the fund invested $150 million in China’s most valuable private company, Ant Financial Services. Other foreign investments include cryptocurrency wallet provider Abra and airborne wind turbine maker Altaeros Energies.
India’s wealthy still seem to prefer more conservative investments. High-net-worth-individuals (those with $50 million in assets) invest primarily in stocks, bonds, property and gold. In recent years direct investments have caught on. An increasing portion of India’s wealth is being deployed in alternative assets, private equity and even cryptocurrencies, according to a recent Knight Frank report.
Tata’s investment success may set the tone for other wealthy families in the country. RNT Associates serves as advisors to three other local venture capital firms – IDG Ventures, Jungle Ventures and Kalaari Capital.
Other Indian family offices, such as Burman Family Holdings and Unilazer, have intensified direct investments in recent years. For now, the share of venture capital and private investments from domestic investors remains small. According to estimates from Livemint, 80% of the funds deployed in India’s startup space can be traced back to either Europe or the U.S.