India’s rich are moving 40-45% of wealth beyond stocks, real estate – what are they buying?

The Julius Baer-EY 2026 “Indian family office playbook: Now, next and beyond” says that 40–45% of allocations in many family offices are now directed towards alternatives. These include private equity (PE), venture capital (VC), private credit, alternative investment funds (AIFs), real estate investment trusts (REITs) and infrastructure investment trusts (InvITs).

This does not mean that every wealthy Indian family is putting 40–45% of its total wealth into these assets. The report specifically refers to allocations in many family offices.

So, what exactly are India’s rich buying outside the traditional portfolio?

From wealth preservation to wealth creation

The change starts with a shift in investment philosophy.

Earlier, Indian family offices were largely focused on preserving wealth. Their portfolios were concentrated in domestic equities, fixed income and real estate. Money was also often reinvested into the family business. The approach was more conservative and relationship-driven.

The report says this is changing. As wealth pools have grown, family offices are increasingly looking at wealth creation and active capital deployment, rather than only wealth preservation.

Debt instruments, the report says, offer limited scope for returns. This has encouraged family offices to look at private credit, PE and global opportunities for higher risk-adjusted returns and long-term value creation.

Adil Chacko, Executive Director, Anand Rathi Wealth Limited, says the rise in wealth and the changing profile of wealthy families are important reasons behind this shift.

“Most important point to consider is generational shift in investment philosophy, from wealth preservation towards wealth creation and active capital deployment,” Chacko said.

He also points to the growth in India’s UHNI population and the large pools of capital created through IPO monetisation. The report says India now has more than 19,000 ultra-high-net-worth individuals, defined as those with assets above $30 million, and this number could cross 25,000 by 2031.

Where is the money going?

1. Private equity and venture capital

PE and VC are among the biggest beneficiaries of the shift.

The report says dedicated allocations of 10–20% or more towards PE and VC are increasingly common. These investments cover sectors such as technology, healthcare, renewables, consumer businesses and selective global real estate platforms.

Family offices are also moving beyond simply investing in PE and VC funds.

They are increasingly investing directly in startups, unlisted growth companies and co-investing alongside PE and VC funds. The report says this gives them greater strategic involvement and access to early-stage value creation opportunities.

Chacko says PE and VC give family offices access to private businesses and high-growth companies before they become fully accessible through public markets.

“For first-generation entrepreneur-led family offices, this space also provides exclusive access like co-investment rights and business introductions,” he said.

The report also highlights the growing importance of co-investments. Family offices are negotiating for co-investment rights depending on the size of their investment. This can help with diversification and lower fee drag.

2. Private credit

Private credit is another area gaining attention.

The report says family offices are looking at private credit as demand for capital rises. The broader alternative asset market in India is estimated at $400 billion, including $156 billion in SEBI-registered AIFs, with the rest coming from offshore vehicles, family offices and unlisted structures. The report cites an estimate that this market could grow to more than $2 trillion by 2034.

Private credit is also becoming part of the larger move towards alternatives. It allows family offices to participate in lending and credit opportunities outside traditional bank-led structures.

But this is not simply a search for higher returns. The shift also comes with more complexity.

The risks are higher too

A bigger allocation to alternatives can make a portfolio more difficult to manage.

One of the biggest risks is illiquidity.

PE, VC and several AIF strategies can lock up capital for years. Chacko says investors need to be aware that some PE and VC investments can have a five- to 10-year capital lock-in.

“That makes it difficult to access capital when required,” he said.

The report also points out that investment options have become much more complex. Family offices now have to evaluate PE, VC, real estate, hedge funds, digital infrastructure, climate technology and other alternative assets. Each has its own cycle, risk profile and due-diligence requirements.

That makes manager selection important.

Chacko says investors should not look at the expected return alone. They should examine the lock-in period, liquidity needs, valuation methodology, leverage, underlying assets, reporting standards, fees and the fund manager’s track record across market cycles.

Another issue is valuation.

Unlike listed shares, private assets are not continuously marked to market. Chacko says valuations can remain at reported levels until the underlying investment is actually sold.

“Investors should therefore focus more on actual cash distributions rather than relying solely on reported NAV,” he said.

Transparency is another concern. Private-market investments generally have less frequent disclosures than listed investments, while outcomes can vary significantly across fund managers.

This means a large alternatives portfolio needs stronger governance and professional oversight.

It is not just about PE and VC

The shift in family-office portfolios is broader than PE, VC and private credit.

The report says wealthy families are also investing in AIFs, REITs and InvITs. It also identifies long-short funds among the alternatives being considered by sophisticated Indian HNIs and family offices.

There is also a growing focus on thematic investing.

The report says younger family-office leaders are looking at areas such as AI, climate technology, renewable energy, digital infrastructure, energy storage, semiconductors, electronics manufacturing, cloud services and data centres.

This is an important change from the old family-office model.

Instead of simply investing in an asset and waiting for it to appreciate, some families are using their business knowledge and networks to identify sectors and companies where they have an edge.

The report says family offices are increasingly acting as long-term private capital providers. They are investing as limited partners in PE and VC funds and also making direct investments in late-stage ventures.

They are also looking outside India

Another part of the strategy is geographical diversification.

The report says Indian family offices are allocating capital overseas to reduce concentration risk, access deeper private markets, invest in areas such as AI, semiconductors, climate initiatives and robotics, and manage currency exposure. Some families are also setting up overseas offices and local investment teams.

So, the “alternative” portfolio of a wealthy Indian family may not necessarily be limited to an Indian PE fund or an AIF. It can include global private-market funds, direct investments and other overseas opportunities.

The report also notes that initiatives such as GIFT City are creating domestic pathways for outbound investments.

The younger generation is changing the portfolio

There is another force behind this change — the next generation.

The report says around 20% of high-net-worth individuals in India are below 40. Many have studied abroad, built global networks and are more directly involved in investment decisions. They are also seeking greater transparency and measurable impact.

This is changing what family capital is being used for.

The report says next-generation members may not always want to join or replicate the family’s original business. Instead, they may want to invest in technology, climate solutions, healthcare, media, impact investments or philanthropy.

Chacko also sees this generational shift as important.

He says younger generations are more comfortable investing directly in businesses, participating as LPs in PE and VC funds and seeking co-investment opportunities.

That also gives them access to emerging themes where opportunities in listed markets may be limited or may emerge only later, he said.

The family office itself is becoming more professional

There is one more change that sits behind the investment shift: how the money is managed.

The report says family offices are increasingly hiring dedicated CIOs, CFOs and risk professionals. More than 70% in a cited study acknowledged the need for governance-led processes. Dashboards, performance metrics and formal audit trails are also becoming more important.

This is significant because alternatives require more due diligence and monitoring than a simple portfolio of listed shares or bank deposits.

The report says family offices are moving towards more formal investment policy statements, asset allocation frameworks and structured review processes. The emphasis is shifting from relationship-driven investing to process-backed decision-making.

For wealthy families, therefore, the move into alternatives is not simply about chasing higher returns. It is also about building the systems needed to manage a much more complex portfolio.

What does this mean for investors?

The biggest takeaway is that India’s wealthiest families are diversifying beyond traditional assets, but they are doing so with a very different risk capacity and time horizon.

A 40–45% allocation to alternatives should not be treated as a template for ordinary investors. The report itself describes family offices as long-term capital providers with the ability to invest across private markets, direct investments and global opportunities.

And alternatives come with risks that are very different from those of listed equities or bank deposits.

As Chacko puts it, alternatives should be assessed not just on the return they promise, but on liquidity, lock-in, valuation, leverage, underlying assets, fees, reporting and the track record of the manager.

For India’s richest families, the portfolio is increasingly becoming a mix of private equity, venture capital, private credit, AIFs, REITs, InvITs, direct investments and global assets, with a growing focus on themes such as AI, healthcare, renewable energy, semiconductors and digital infrastructure.

The bigger change is perhaps this: India’s family offices are moving from being passive custodians of wealth to becoming active investors and private capital providers. The report says this evolution is being driven by growing wealth, a new generation of investors and the search for diversification and long-term value creation.

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.

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