Building the Private Market Stack – The Interplay of Credit, Secondaries, and Real Assets

India’s private-market landscape is evolving from a set of discrete investment categories into a connected capital system. Private credit, real assets, and secondaries, once seen as separate strategies, are increasingly functioning as interlinked layers of the same market architecture. Together, they are creating the foundation of a self-sustaining ecosystem where capital is created, recycled, and redeployed within the private domain.

This layered system, what many describe as the private market stack, marks a step-change in India’s financial evolution. It represents the transition from linear capital formation, where funds raised and exited in isolation, to a cyclical model, where liquidity, yield, and reinvestment reinforce one another.

A Multi-Layered Capital Architecture

Private credit is the debt engine of India’s private markets. This segment provides flexible financing to mid-sized corporates, infrastructure developers, and real-estate platforms. With banks and non-bank financial companies reducing their share of corporate lending over the past decade, private credit has become the primary source of structured, asset-backed funding for enterprises outside the public credit system. Unlike traditional bank loans, private credit offers bespoke financing terms and is designed for situations where capital speed, structure, or discretion matter more than cost. Its steady coupon profile has also made it a natural fit for institutional portfolios seeking predictable yield.

Real assets form another layer, comprising income-generating infrastructure and real estate vehicles such as Infrastructure Investment Trusts (InvITs), Real Estate Investment Trusts (REITs), and infrastructure-focused AIFs. These vehicles represent India’s formalisation of long-duration, yield-oriented assets. They serve as the market’s stability anchor, offering investors recurring distributions and transparency through regulated, listed frameworks. Real assets translate India’s physical growth (roads, power grids, warehouses, data centres) into financial products that can be owned, traded, and monitored like any other asset class.

Then there is the liquidity layer. Secondaries allow investors to buy and sell stakes in existing funds or portfolios, providing liquidity without requiring an IPO or acquisition event. For limited partners (LPs), they offer exit optionality; for fund managers (GPs), they enable continuation vehicles and fund-level restructuring. In mature ecosystems, secondaries are the mechanism that transforms private markets from closed-end to continuous systems. Their rise in India, though still early, signals that liquidity is being institutionalised alongside yield and credit depth.

From Linear Growth to Cyclical Continuity

The earliest phase of India’s private markets was linear: funds raised capital, deployed it into companies, exited via public listings or sales, and then restarted the cycle with new capital.
That model depended heavily on external inflows, often from foreign LPs, and had limited internal recycling capacity.

Today, that dynamic is changing. As private credit, real assets, and secondaries gain depth, India’s private markets are beginning to function as a continuous system. A credit fund may refinance an infrastructure platform; an InvIT may acquire those same assets from a developer; a secondary buyer may acquire positions in either fund, all within a regulated domestic framework. Each of these transactions keeps capital circulating internally rather than relying solely on new foreign commitments.

This feedback loop, the flow of capital between origination, income, and liquidity, is the hallmark of a maturing financial ecosystem. It allows funds to compound within the system, creating permanence instead of episodic growth.

The Private Credit–Real Asset Link

Private credit funds increasingly provide development or mezzanine financing to sectors that later transition into yield-bearing vehicles, including renewable energy, logistics, transport, and utilities. Once these projects reach operational stability, they are frequently refinanced or acquired by InvITs or infrastructure-focused funds.

This sequencing creates efficiency across stages of capital formation. Credit investors earn structured returns during the build-out phase, while real-asset investors acquire de-risked, income-generating platforms. The result is a continuous funding chain, from development to operation to monetisation, within the private ecosystem.

This alignment also fits naturally with the investment mandates of domestic institutions. Insurers and pension funds can participate at multiple levels, via credit funds for shorter-duration yield and through InvITs for long-term income, while remaining within regulated instruments. It is a model that converts India’s infrastructure buildout into investable, recurring financial products across risk layers.

Secondaries as the System’s Pressure Valve

Secondaries are emerging as the crucial connector between duration and flexibility. In periods when IPO or M&A markets are subdued, secondary transactions provide a structured path for exits and capital rotation. They enable fund managers to extend the life of performing assets or portfolios, while allowing incoming investors to gain exposure without waiting for new fundraising cycles.

Globally, secondaries have long been the bridge between long-hold capital and immediate liquidity needs. India’s market, while nascent, is developing the regulatory and operational frameworks to support such transactions. The growth of GP-led continuation funds and structured secondary deals among Indian AIFs shows that liquidity is becoming an embedded feature of India’s private markets.

In systemic terms, secondaries are the “pressure valve” of private markets. They keep the flow of capital active even when traditional exit markets slow down, ensuring that valuation discipline and liquidity remain intact across cycles.

The Global Markets and India’s Distinction

In advanced markets, such integration between credit, yield, and secondary capital took decades to evolve. India’s progression has been faster, largely due to simultaneous development across all three fronts: credit depth, yield vehicles, and regulatory infrastructure. The result is a convergence in structure: India’s alternatives are now organised around interconnected layers rather than standalone themes. And this is positioning India as one of the more structurally balanced private-market systems in Asia.

Research Analyst

Simran Mehla

Frequently Asked Questions

Q: What is changing in India’s private-market structure?

A: India’s private markets are moving from standalone asset classes to an interconnected system. Private credit, real assets, and secondaries are increasingly linked, with credit financing projects, real assets generating income, and secondaries providing liquidity.

Q: What is private credit’s role?

A: Private credit has filled the gap left by traditional lenders, providing structured financing to companies. It supplies flexible debt capital and creates a bridge to income-generating vehicles such as InvITs or infrastructure funds.

Q: What function do real assets serve?

A: Real assets, including InvITs, REITs, and infrastructure AIFs, convert India’s physical growth into financial assets. They provide steady yield and transparency, attracting long-term investors such as pensions, insurers, and sovereign funds seeking recurring income.

Q: Why are secondaries important for private markets?

A: Secondaries introduce liquidity into an otherwise long-hold market. They allow investors to exit or realign portfolios without waiting for IPOs or acquisitions. This flexibility helps maintain cash flow, valuation discipline, and continuous investment momentum.

Q: What does this evolution mean for investors and managers?

A: This enables investors to allocate across credit, yield, and liquidity strategies within a single system. For fund managers, it allows capital to be redeployed efficiently, building a market that is less episodic and more durable across cycles.