The Gen Z billionaires who are bored with business

The Age

2 days ago

The family that ran India's largest luggage maker for more than half a century is packing it in, with control of Mumbai-based VIP Industries passing to private equity.
'What do I do?' chairman Dilip Piramal, 75, wondered aloud in a TV interview after announcing the sale. 'The younger generation is not interested in management.'
Piramal isn't the only ageing businessperson to have run out of successors. 'Today among the scions of some of the most affluent families of India, someone is an artist, someone wants to be a sportsman, someone wants to run a small restaurant. There's nothing wrong in that. It's the modern trend, people want to do their own things,' he said.
Two hundred years ago, that 'modern' trend among young people used to be enterprise. That's when families like Piramal's began to spread out of the Marwar region in land-locked northern India to take advantage of British-controlled trading opportunities in the port cities of Bombay and Calcutta – now Mumbai and Kolkata. Cotton, jute and opium sold to China provided the seed capital to the Marwari business community for everything from textile mills to cement factories.
By the early 20th century, these emerging industrial empires were large enough to challenge the colonial masters and their commercial interests. The likes of Ghanshyam Das Birla openly supported Mahatma Gandhi's campaign for independence, even as they outran rivals like Andrew Yule & Co. The Birla House in Delhi, a prominent hub for the freedom movement, was also where Gandhi was assassinated. As the sway of family firms continued after India's 1947 independence, it was believed that newer generations would always be available to take over the reins.
Below the surface, however, the link between ownership and management has been weakening for some time. Piramal's daughter, Radhika, a Harvard University MBA, was the chief executive officer for a few years before quitting in 2017 and relocating with her spouse to London. Her same-sex marriage is not legally recognised in India. The luggage maker was back to being in the care of professional managers, a double-edged sword considering that a rival firm set up by a former managing director is now three-fifths bigger than VIP by market value.
The heirs of prominent business families – Millennial and Gen Z billionaires – are setting their own life goals. It's the sensible thing to do. In a labour-surplus economy, access to capital through clan networks and strategic marital alliances was family-run firms' core advantage. But via public markets and private equity, finance is now available to a much wider section of entrepreneurs. Risk-taking has been democratised.
That frees up younger members of business dynasties to try new things. Someone recently asked the singer-songwriter Ananya Birla on social media if she was from the family behind India's largest-selling cement brand. She is indeed the great-great-granddaughter of Ghanshyam Das Birla. But from financial inclusion among rural women to a recently launched beauty brand, the 31-year-old Oxford graduate has her own interests that are independent of the sprawling commodities behemoth led by her father.