Indian wealthy investors remain significantly underinvested in global equities despite recent market rallies, according to Rajeev Thakkar, Chief Investment Officer and Director at PPFAS Asset Management. Speaking at the ET Alpha Wealth Summit panel discussion on 'Global or Local? The New Allocation Reality', Thakkar argued that even investors with 5%, 10%, or 15% international allocations are structurally underweight due to India's small share of global stock market capitalisation. He urged investors to begin increasing global exposure now rather than waiting for better entry points.
Thakkar advocated for a strategic, multi-generational approach to wealth preservation rather than tactical year-to-year strategies. He referenced 'Fortune's Children', a book chronicling how the Vanderbilt family lost their fortune within two generations, as a cautionary tale for families focused on building lasting wealth. The panel discussion also included Nilesh Shah, Group President & Managing Director of Kotak Mahindra Asset Management Company, and Rajesh Saluja, Co-Founder, CEO & MD of ASK Private Wealth.
Thakkar illustrated the importance of diversification with historical examples, including buggy-whip manufacturers who were wiped out by automobiles and Mumbai's once-dominant textile mill owners who lost their position as industries shifted elsewhere. He emphasized that even dominant industries can become obsolete, making diversification essential for wealth protection across generations. The panel stressed that guarding against concentration risk is crucial for India's growing base of high-net-worth investors.
According to Thakkar, lasting wealth creation requires combining strong themes with quality promoters, management, proven execution capability, and robust balance sheets. He suggested favouring companies with genuine pricing power over those in commoditised, intensely competitive segments. Applied to today's power and energy infrastructure boom, he noted that while some companies will create lasting value, others with strong volume growth may ultimately fail to deliver sustainable returns.
The panel's message emphasized that building genuine global exposure rather than token allocations is essential for India's high-net-worth investors. They stressed the importance of resisting the temptation to chase narratives without scrutinising underlying business fundamentals. The discussion highlighted that preserving wealth across generations requires focusing on business fundamentals rather than just market themes, with the core principle being that strong themes alone are not sufficient for lasting wealth creation.
