A living, breathing definition of the term ‘Value-add’, Dr. Aarti Gupta has been diversifying and expanding her husband’s family’s investments for more than a decade, while developing and growing her own hugely successful venture portfolio.
Holding a PhD in Economics from IIT Kanpur, a post-graduate diploma in business studies from Harvard University and a master’s degree in economics from Northeastern University in Boston, Dr. Gupta firmly believes that education informs great investment… It’s a strategy that is clearly reaping dividends.
Ahead of chairing Campden Family Connect’s Indian Family Office Forum on November 23, 2022, in Mumbai, India, Dr. Gupta talks about adaptability and open-mindedness, learning and innovation…
Questions of governance, growing interest in startup investment and the changing landscapes of family offices loom large at The 7th Indian Family Office Forum this year. As the head of investment strategy for DMG family office, what are you hoping to get out of the forum?
Campden has always provided a platform to network and interact with like-minded individuals who are either working with the family office or are principals of their own family offices.
This year, I’m hoping to meet with peers to exchange ideas, share experiences and learn about strategies which can help overcome common problems faced by businesses and family offices, such as investment, succession planning, impact and philanthropy.
It will be interesting to learn how family offices are structuring to go global. There are some new rules and regulations around investing overseas in India and I’d love to hear about similar family’s experiences.
Can you talk a little about your family business Jagran Group and how you got involved?
The Jagran Group is a leading business house of India and was incorporated, pre-independence in 1942 by my husband's grandfather. We are a huge joint family with most of the family working within the family business. The interest of the group spans across media communications, education, real estate holdings and exports. The group employs more than 12,000 people and has offices in more than 200 cities in India.
By education, I’m an economist and I accidentally found myself in this investment space about 12 years ago while I was pursuing my PhD. I started casually looking into our family's investments which were mainly into fixed deposits. I started reading up a little and suggesting small changes and, over time, took on the role of managing personal investments for our family. I started advising other family members with things like alternate investments and how to allocate different assets. Now, we have a well-defined and diversified portfolio and a good evolving family office structure in place.
It's rare for the daughter-in-law of the family to be heading the family office.
It's still rare for people who marry into families to become not only a part of the family business but also the family office. How did that conversation come about?
Not just in India, globally it's rare for the daughter-in-law of the family to be heading the family office. I would like to give credit to my father-in-law for being so supportive and progressive about it. It actually did not start as a conversation like, ‘Hey, we have a family office, let me help’. It literally started with me researching all his investments and suggesting minor changes here and there. Over time. I think when the family saw value in what I was bringing to the table, that's how it evolved into this role.
Additionally, as chief investment officer at DBR Ventures and a featured investor on Indian reality show Horses Stable, you have a huge amount of angel investor experience. What excites you to invest?
From a family office point of view, about 85% of our investments are either fixed incomes or equity. But with the venture space heating up in the past decade, I slowly started to push the family for some allocation in VC. It wasn't easy, because we come from a very traditional mindset, so we started by investing into funds because we thought that was the safest way to understand the space better.
Then, as I was interacting with the venture ecosystems, especially in India, I personally got drawn into it and started making some direct investments. So today, as a family office, we have investments in the venture space through funds, all the way from early-stage to pre-IPO levels. We also have a separate entity, which invests directly into startups and early stage. Even though it's a small part of the family office, it's something which I'm very passionate about.
As an investor, I'm sector agnostic. I invest in early-stage companies which provide intelligent solutions to existing problems. I think there are so many problems out there that if you provide a solution which is scalable, that piques my interest. Often, because I'm investing at an early stage, a lot of my money is put on the founder themselves. It's extremely important that the founder has grit, patience and adaptability to change their strategy, if needs be. Obviously, for me, gender doesn't matter when I'm looking to invest but I do put in a lot of time and effort to mentor and support women-led companies.
You describe yourself as a “Perpetual learner”, where does that drive to educate and evolve come from?
I think leadership and learning are indispensable. People assume that once you achieve a certain milestone, you should stop going back to the classroom. I actually went back to school to get my PhD in economics with a two-year old child, and I like to take a learning break almost every year. I think it's extremely important that we continue to update ourselves. Personally, I transitioned from studying economics to managing finance and investments and now have added angel investing to my portfolio. When I went to school, nobody taught venture, so everything I learned had to be on the job or by taking some courses on it. The learning cannot stop.
Agility and adaptability is very important when it comes to investments.
How important is adaptability and open-mindedness to your continuing success?
I think agility and adaptability is very important when it comes to investments. In my interaction with a number of family offices, those that are more open to understanding newer investment opportunities are the ones that move ahead with times and actually manage to become quite successful.
Obviously this doesn’t mean that every alternate asset class needs to be invested into. One needs to weigh the risk and returns, but you have to move with the times.
What would you advise to family offices looking to get into VC but don’t know where to start?
I'll speak from my experience, because I don't think I went about it in the most accurate way. When I was getting into the venture space, I had nobody in my circle who was doing it so I kind of had to figure out the way.
One of the very first things to do is to identify why you want to enter into the space. Is it asset class diversification for an existing portfolio or extra return to boost the internal rate of return (IRR) in your portfolio? Or do you feel that you have a certain expertise which can help fast track a particular startup’s growth.
It could be a combination of reasons, but the purpose has to be very clear because that's what will help you find your investments. Once you put it out there that you’re an angel investor with some money, the number of pitch decks you will receive is going to be difficult for you to filter out. For me, it started as an asset class diversification and slowly I realised that there are certain areas and sectors where I could add value.
Dr. Aarti Gupta will chair Campden Family Connect’s Indian Family Office Forum on November 23, 2022, in Mumbai, India. For more information, click here.