Super rich Indians’ investment in PE to be Asia’s highest this year, says report

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Published: May 21, 2019 6:55:21 PM

India's super-rich are increasingly looking at private equity (PE) as an alternative investment class with 46 per cent of the country's ultra-high-net-worth individuals (UHNWI) are expected to enhance their PE investments in 2019.

Globally, 31 per cent UHNWIs are likely to have their investment in PE go up from 25 per cent in 2018.

India’s super-rich are increasingly looking at private equity (PE) as an alternative investment class with 46 per cent of the country’s ultra-high-net-worth individuals (UHNWI) are expected to enhance their PE investments in 2019. This is up from 37 per cent last year and also fourth highest globally, said a survey by global property consultancy firm Knight Frank.

UHNWIs are increasingly eyeing at exploring alternative areas where they can invest and PE offers them a structured investment option for a long term, says Shishir Baijal, Chairman & Managing Director, Knight Frank India.

As the amount of wealth in India is increasing the fastest globally, India’s super-rich are likely to reduce exposure to cash and boost their investment in PE this year as local investors grow in sophistication, added Baijal. “In the Indian market, there is a strong bend towards Equities and Private Equities.” However, 9 per cent of the survey respondents in India said that their investment in PE is expected to be reduced this year.

Globally, 31 per cent UHNWIs are likely to have their investment in PE go up from 25 per cent in 2018 even as overall 26 per cent Asia’s UHNWIs might increase their allocation this year from 20 per cent in 2018. Knight Frank ran the survey to gauge the sentiment of UHNWIs towards PE investments as an asset class in 2019.

Following India, it is Africa (37 per cent), Europe (36 per cent), Middle East (36 per cent), Australasia (35 per cent), North America (28 per cent), Latin America (25 per cent), Russia/CIS (24 per cent) that expects its UHNWIs to increase investments in PE this year.

The number of wealthy Indians is likely to increase by 88 per cent over the coming five years, IIFL Wealth Management and the U.K.-based Wealth-X had said in a survey last year December titled IIFL Wealth Index 2018. From 284,140 dollar millionaires that had a combined wealth of Rs 95 lakh crore in 2016, the amount is expected to increase to Rs 188 lakh crore. The number of HNIs is expected to grow to 500,000 in five years, the report had said.

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