In the fast-paced world of high net-worth individuals (HNIs), investment choices extend beyond financial returns. They seek a blend of profitability, purpose and prestige. Understanding these sophisticated investors reveals the highly diverse nature of an HNI’s investment portfolio.
From innovative tech ventures to sustainable initiatives, HNIs are increasingly drawn to opportunities that not only offer high potential returns, but also aligns with their future financial goals.
“With a keen eye on growth and diversification, HNIs are exploring avenues beyond the traditional assets, which offer both financial prosperity and social impact. Understanding what captivates HNI interest in investment will help strategize and shape their portfolios,” says Swati Saxena, Founder & CEO, 4 Thoughts Finance.
Alternative Investment Funds (AIF)
AIFs are a type of investment fund that invest in assets that are beyond the traditional realm of assets such as equity and debt. Private equity, venture capital, real estate, hedge funds, and debt funds are some examples of potential high return AIFs. These funds are registered with SEBI and are popular among HNIs. Investing in AIFs offers great diversification benefits alongside the potential for higher returns. These are also professionally-managed assets and offer a huge deal of customization of assets making it a more convenient option for HNIs.
Also Read: Mutual Fund Investment: When is the right time to start investing in mutual funds?
Portfolio Management Services (PMS)
Portfolio management services are another lucrative investment option for HNIs. “This is because of the tailored investment solutions it provides to this investor class. The investments are managed by professional portfolio managers and have the potential to generate better returns than the market. PMS are tailored to meet individual parameters like risk appetite, return expectations, time-frame and more,” says Saxena.
Unlisted Shares
HNIs are also investing in pre-IPO stocks, otherwise known as unlisted shares. These shares are not traded on the stock exchange and are instead bought and sold through the Over-the-Counter (OTC). Investing in unlisted shares allows investors to gain early access to new-age organizations with a focus on technology, innovation, and unique business ideas. Additionally, HNIs can purchase the desired amount of shares based on their investment capacity, which may not be possible during an IPO due to oversubscription causing lower allocations.
REITs & INvITs
Real estate investments have long been the favorites of many, especially Indians. But they have been laced with obstacles due to high ticket sizes and limited liquidity. However, “new investment options like REITs and INvITs enable investors to participate with lower financial commitments and increased liquidity. SEBI has also recently lowered the minimum investment values for REITs and INvITs, making them more accessible to people,” informs Saxena.
Exotic Investments
Exotic investments that appreciate in value also captivate the interest of HNIs, because it not only gives a luxurious experience to the HNIs, but it also yields significant returns. High-end watches, expensive art works are some appreciating exotic investment options for HNIs to look into.
Disclaimer: Views and facts expressed above are those of the author. They do not necessarily reflect the views of financialexpress.com. Readers are advised to consult their financial planner before making any investment.