India’s alternative investment market could expand more than five-fold to over $2 trillion by 2034, driven by rising participation from wealthy investors and a growing search for assets that offer higher returns and move differently from public markets, according to a Julius Baer-EY report.

The study estimates the country’s alternative assets market at around $400 billion, of which about $156 billion is held through Securities and Exchange Board of India-registered Alternative Investment Funds (AIFs). The rest is spread across offshore vehicles, family offices and other unlisted structures.

Higher participation from high-net-worth individuals, policy support and demand for higher-yielding assets with relatively low correlation to listed markets could push the market beyond $2 trillion over the next eight years, the report said.

The shift is also changing how India’s wealthy families manage their money.

Family offices, traditionally set up to preserve and manage the wealth of wealthy business families, are increasingly acting more like institutional investors, backing private equity and venture capital funds, investing directly in companies and participating alongside professional fund managers through co-investments.

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Family offices turn active investors

Between 40% and 45% of allocations at many Indian family offices are now directed towards alternative assets such as private equity, venture capital, private credit, AIFs, REITs and InvITs, according to the report.

The EY study estimates that allocations of 10-20% or more towards private equity and venture capital alone are becoming increasingly common.

As per the study, this trend marks a significant departure from the earlier approach, when family wealth was largely concentrated in domestic equities, fixed-income instruments and real estate, with substantial capital also being reinvested into the family business.

The EY study postulates that the change has most likely been aided by a rapid expansion in private wealth following IPOs, private equity exits and other promoter liquidity events.

India had more than 19,000 ultra-high-net-worth individuals defined as those with assets exceeding $30 million with the number expected to cross 25,000 by 2031.

Estimates cited in the report suggest the number of family offices in India rose from around 45 in 2018 to nearly 300 by 2024-25, although comprehensive data on the sector remains unavailable.

Mid- and large-sized Indian family offices collectively managed an estimated Rs 70,000 crore in assets in 2024. Their assets are projected to grow at a compound annual rate of about 14% over three years, taking the pool to roughly 1.5 times its 2024 level.

Where is the money going?

The investment universe is also widening. Family offices are increasingly looking at artificial intelligence, renewable energy, cloud and data-centre infrastructure, semiconductors and other sunrise sectors, while seeking greater access to direct deals and co-investment opportunities, EY reported.

Private credit is another area attracting attention as companies look for capital outside conventional bank lending and public debt markets. Real estate, meanwhile, continues to remain a major part of portfolios both in India and overseas.

Growth brings governance challenge

The growing size of family offices, however, is also creating governance and compliance challenges.

Unlike financial centres such as Singapore or Switzerland, India does not have a dedicated regulatory framework for family offices. They currently operate through existing securities, corporate and trust-law structures, even as their investment activities become increasingly complex and international.

The report said family constitutions, investment committees, professional management teams and clearer succession structures are consequently becoming more common. Family offices are also increasingly hiring specialised professionals and building capabilities in areas such as risk management, tax, cybersecurity, due diligence and compliance.

That institutionalisation will become more important as private wealth moves deeper into less-liquid and more complex assets. For India’s alternative investment industry, the bigger pool of family capital could provide a long-term source of funding for private businesses in sunrise sectors and companies looking to build digital infrastructure.

But the rapid expansion will also test whether governance, transparency and risk-management systems can keep pace with the money being deployed. Family offices are moving beyond traditional equities, deposits and real estate, with private equity, venture capital, private credit and AIFs taking a good share of portfolios.

Disclaimer: This story is based on the Julius Baer-EY 2026 report, “Indian family office playbook: Now, next and beyond”. The investment patterns discussed relate to family offices and wealthy families and should not be treated as investment advice or as a recommended asset allocation for individual investors. Alternative investments can involve high risk, limited liquidity, long lock-in periods and valuation risks.