India’s family offices embrace profit-sharing to attract top talent

India's burgeoning wealth management sector is witnessing a significant shift as family offices, often backed by billionaires, increasingly adopt profit-sharing models to secure top investment talent. This move highlights the fierce competition for skilled money managers in one of the world's fastest-growing wealth markets.

Prominent family offices, including those associated with tech founder Azim Premji and consumer goods tycoon Harsh Mariwala, are already offering carried interest – a share of investment profits. Several newer family offices are also considering similar arrangements, according to sources familiar with the matter. While Premji's firm declined to comment, Mariwala's Sharrp Ventures confirmed the practice.

Globally, offering long-term incentive plans like carried interest is not yet widespread, with less than a third of family offices providing them. US family offices are reportedly the most likely to offer such benefits. However, the trend in India signifies a maturing market where wealthy individuals are willing to share profits to align interests, foster a long-term ownership mindset, and retain key personnel.

The scarcity of experienced investment professionals is forcing Indian founders to compete directly with venture capital firms, asset managers, and investment banks. The number of family offices in India has dramatically increased, soaring from just 45 in 2018 to over 300 in 2024. This expansion has led to a combined asset base estimated at over $30 billion, underscoring the need for sophisticated talent acquisition and retention strategies.

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All family offices should consider implementing a long-term incentive plan for their investment teams to better align interests, foster a long-term ownership mindset, and retain key talent.