Family offices frequently describe gold, real estate, fixed income and other defensive assets as safe havens. However, what qualifies an asset for that role, and what investors should expect it to deliver within a portfolio, is often less clearly defined.
Speaking at the VCCircle Family Office Summit 2026, Vikas Biyani, Associate Director and Portfolio Advisor at Multi-Act, outlined the frameworks his firm uses while advising family offices. He explained why gold is widely regarded as a safe haven, how quasi-fixed-income assets can help address the limitations of traditional fixed income, and why investors must judge each asset according to the role it is expected to perform.
Why Gold Qualifies as a Safe Haven
Mr. Biyani began by questioning why gold is so frequently identified as the safest of safe-haven assets.
“Gold, I think everybody has talked about, but has anyone thought why gold?” he asked.
He referred to Aristotle’s observations on the characteristics of money, noting that gold is divisible, indestructible, convenient, consistent and capable of serving as a store of value. Any asset that meets these criteria, he said, can function as real money, and money is fundamentally what a safe haven represents. Gold also has no counterparty risk because it serves as a store of value in its own right.
A Safe Haven Has No Counterparty Risk
Mr. Biyani defined a safe haven as an asset that is not dependent on another party meeting an obligation.
“Safe haven is an asset which doesn’t have any counterparty risk,” he said.
Even currency notes carry counterparty risk, he explained, as they are backed by the sovereign’s commitment to pay. Although sovereign risk is different from corporate risk, it is still a form of counterparty exposure. Other financial assets are generally liabilities on somebody else’s balance sheet, whether they are equity or fixed-income instruments. Safe-haven assets, by comparison, are typically unencumbered and are therefore treated as real money.
Gold as Insurance Against Tail-Risk Events
Mr. Biyani used the Great Depression to illustrate the role of safe-haven assets during severe financial-market stress. The broader point, he said, is that preserving purchasing power during major market declines can leave investors with the ability to deploy capital when other assets have fallen sharply. ‘That’s the real safe haven part of it,’ he said.”
Gold’s purpose in a portfolio, therefore, is not simply to avoid losses. It is also to preserve purchasing power when other asset classes experience severe drawdowns.
Finding Quasi-Fixed-Income Opportunities
Mr. Biyani’s second framework focused on identifying assets that can perform a role similar to fixed income. Following the taxation changes of 2022-23, he said, post-tax returns from traditional fixed-income investments became more difficult to justify.
Multi-Act’s approach has therefore been to explore asset-class structures that behave like quasi-fixed income and are supported by real cash flows, tangible assets or predictable income streams. The objective is to identify exposures capable of “giving you equity type returns at a fixed income type risk.”
He pointed to regulated utilities as one area that had received relatively little attention during the discussion. Although these businesses may be leveraged, he said, they can generate regular cash flows. He also included REITs, InvITs, private credit and structured credit within the broader opportunity set. However, the structure and underlying risk of each investment remain important.
“You don’t want to maybe go to special situations, go to a performing credit, but that gives you a quasi-fixed income with relatively safer approach,” he said.
The focus, therefore, should be on performing credit and cash-generating assets rather than higher-risk special-situation opportunities.
Building an All-Season Portfolio
The third component of Mr. Biyani’s safety-first framework is a robust all-season portfolio constructed at the asset-allocation level. He recommended holding three or four asset classes throughout market cycles that are, as far as possible, uncorrelated with one another. Cyclicality affects almost every asset class. When one or two allocations pass through a weak cycle, the remaining assets should help preserve the investor’s purchasing power.
“If you put together a robust all-weather portfolio, I think asset allocation-wise, it would have done the job,” he said.
A defensive portfolio, therefore, does not depend on identifying one completely safe asset. Its resilience comes from combining assets that respond differently to market conditions.
Where a Newly Liquid Family Should Begin
Asked how he would advise a family that had recently sold a business and was holding substantial cash, he agreed with the other panellists that the process should begin with a clearly defined investment policy statement.
The policy should establish a mandated asset allocation that reflects the family’s objectives and risk profile. Within that broader allocation, he suggested beginning with a minimum exposure to assets intended to provide insurance against severe market events.
“Start with at least five or 10% allocation to what we think is insurance, safe haven, hedge, tail risk, hedge kind of an event,” he said.
The allocation is not intended to represent the family’s entire defensive portfolio. Instead, it establishes a base level of protection against events that may significantly affect financial assets and purchasing power.
The Rahul Dravid and Virender Sehwag Analogy
He concluded by emphasising the importance of investor behaviour. He used a cricket analogy involving Rahul Dravid and Virender Sehwag to explain why investors should not expect every asset to perform the same role. Rahul Dravid, he said, was known as “the Wall”, a player capable of defending and batting throughout the day. Virender Sehwag, by contrast, played with a very different style and strike rate.
“Don’t expect then Rahul Dravid to have a strike rate of Virender Sehwag. These are two different beings,” he said.
Similarly, a safe-haven asset should be evaluated according to the role it is intended to perform. It should not automatically be expected to deliver the same return profile as a growth-oriented asset. Mr. Biyani cautioned against simultaneously expecting a safe-haven allocation to provide protection and generate double-digit post-tax returns, arguing that this is where investor behaviour can begin to conflict with the asset’s intended role “A safe haven asset will play a certain role in the portfolio when it will be asked to,” he said.
At the same time, he argued that expectations should not be abandoned entirely. In his view, such an asset should still aim to generate post-tax-adjusted returns upwards of double digits. That distinction, understanding the mandate of each asset and evaluating it accordingly, is central to maintaining disciplined investor behaviour.
About Multi-Act
Multi-Act began in 1997 as the investment research arm of a single-family office, established by two Wharton graduates seeking independent equity research anchored in business quality and a margin-of-safety approach to investing their own capital. The firm managed proprietary capital for 12 years before opening its equity advisory services to external families in 2009. More than half of the assets it advises on and manages continue to belong to its shareholders, an alignment that the firm considers central to its investment philosophy.
The business has expanded in stages. It moved into boutique research and institutional advisory in 2005, opened a portfolio management offering to qualified investors in 2011, established its global solutions arm, Multi-Act EquiGlobe, in 2015, launched a fintech-focused private-equity fund in 2017 and introduced a vehicle for US investors in 2021. Multi-Act is registered with the Securities and Exchange Board of India for portfolio management and investment advisory through Multi-Act Trade and Investments and Multi-Act Equity Consultancy. It also operates Category II and Category III alternative investment funds.
NOTE: This article has been developed by the VCCEdge Research Team for Multi-Act.
