Mumbai: After co-founding an Internet-focused early-stage fund, a hedge fund and a Big Data-focused investment fund, the Patni brothers, Amit and Arihant, are now getting into the advisory space.

The duo on Wednesday said they made a strategic investment in Mumbai-based Waterfield Advisors Pvt. Ltd, an advisory firm for family-owned businesses and trusts, acquiring a significant minority stake for an undisclosed sum.

Amit Patni, now a director with Waterfield, said though the brothers considered starting an advisory firm on their own, they decided that backing a seasoned manager was a better idea.

“Having experienced first-hand the challenges faced by a single family office since setting up our own family office in 2002, we felt that there existed a strong latent need for family office services," he said. “After we exited Patni, we didn’t want to be in the operative business and want to back seasoned managers in financial services."

Waterfield was started by Soumya Rajan, who previously was managing director and head, private bank, at Standard Chartered India, two-and-a-half years ago. The firm provides advisory services to entrepreneurs, ultra wealthy families, trusts and corporate clients under three verticals—family office services, corporate advisory services and alternative asset management (private equity and real estate).

The funds raised will be deployed to strengthen the advisory firm’s family office services portfolio and expand its business. The firm currently works with about 30 families.

“Against a backdrop of a greater number of successful Indian entrepreneurs, the recovering financial climate and increased competition in the market place, there is an urgent need to provide family office services, consolidate personal and family wealth, manage succession and help entrepreneurs develop and grow their operating businesses," said Rajan, managing director and chief executive, Waterfield Advisors.

According to the Credit Suisse Global Wealth Report 2013, there are 1,760 ultra-high net worth individuals with wealth of over $50 million and 770 with more than $100 million in India.

Advisory services to family-owned businesses is a competitive space with banks and independent firms like Avendus Capital also catering to this segment. Rajan said Waterfield will not only cater to the financial advisory demands of clients but also to non-financial requirements related to travel, tax, health and wellness.

“We will help our clients with succession plans, family governance, in charting out ways of doing philanthropy and CSR (corporate social responsibility) activity and even holiday planning…anything that’s outside the realm of financial planning," Rajan said.

Waterfield Advisors’ long-term plans include adding international clients and a non-bank financial company. “We will need an NBFC to cater to the loan requirements of our clients. We want to make the company a full-fledged financial services arm, that’s how value can be delivered," said Amit Patni.

Experts say seasoned entrepreneurs backing younger entrepreneurs is encouraging, as capital continues to be elusive for young companies.

“They are incubating a business, on the same lines as tech firms are incubated in the Silicon Valley. The Patni brothers are backing entrepreneurs with business ideas and expertise. It makes sense to back intelligent entrepreneurs," said Vikram Utamsingh, co-head, of Alvarez and Marsal India and managing director with A&M’s transactions advisory group in Mumbai.

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