What Today’s HNI Wants in Their Portfolio Mix

High Net Worth Individuals (HNIs) in India are no longer satisfied with the traditional playbook of equities, debt, real estate, and gold. As the Indian economy matures, global capital flows intensify, and private markets deepen, HNIs and UHNIs are diversifying into new asset classes. Beyond wealth preservation, their portfolios today are designed for growth, liquidity, and access to opportunities unavailable to the average retail investor.

According to insights from leading private wealth management platforms in India, this shift is transforming how wealth is managed in the country, with Alternative Investment Funds (AIFs), private credit, real estate platforms, and structured products emerging as staples of the modern HNI allocation.

The New Reality of Portfolio Construction

Traditionally, Indian HNIs leaned heavily on a mix of equities, fixed income instruments such as bank deposits and bonds, real estate, and gold or other commodities. While these remain important, three structural changes have reshaped allocations in 2025. The first is falling debt yields which mean traditional instruments no longer deliver inflation-beating returns. At the same time, volatility in public markets has pushed investors toward low-correlation assets. Most importantly, access to alternatives has expanded rapidly: AIFs and structured products, once limited to institutional investors, are now widely available through private wealth managers.

Why AIFs Are at the Core of HNI Strategy

The AIF ecosystem has become the backbone of HNI diversification. According to SEBI data, total commitments to AIFs surged to ₹14.2 trillion as of June 2025, up from negligible levels just a decade ago, reflecting rising demand from affluent investors. Private equity AIFs provide exposure across the company lifecycle, from early growth to pre-IPO, enabling HNIs to capture value before it migrates to public markets. Private credit AIFs, meanwhile, offer higher yields than traditional bonds by lending to stressed or special-situation businesses, an attractive proposition in a low-interest environment. Real estate AIFs allow pooled investments into Grade A commercial properties and REIT-like structures, while infrastructure AIFs open the door to long-term assets such as roads and renewables. In short, AIFs give Indian HNIs access to the same sophisticated playbook used by global family offices and endowment funds.

Secondaries are Solving the Liquidity Problem

One of the biggest challenges for private market investors has always been illiquidity. Unlike listed equities, private investments are long-term and can lock in capital for years. For HNIs who value flexibility, this has been a deterrent. Secondary markets are changing that dynamic by allowing investors to sell their stakes in private companies or funds, creating a liquidity bridge. For HNIs, this means the ability to book profits earlier, reallocate capital to new opportunities, and reduce concentration risk. When accessed via AIF structures, secondaries become even more powerful, as deals are professionally curated and diligenced rather than sourced piecemeal.

Real Estate & Infrastructure: From Physical Assets to Structured Plays

Indian HNIs have always had a deep affinity for real estate. But instead of simply buying apartments or land, today’s portfolios are tilting toward structured real estate plays. REITs provide exposure to income-generating real estate investments such as commercial office spaces without the hassles of ownership. Fractional ownership platforms enable co-investment in institutional-grade assets such as office parks or warehouses. Real estate AIFs pool investor capital into large-scale projects that were once accessible only to institutions. Infrastructure is another rising pillar, with roads, renewable energy parks, and logistics hubs increasingly packaged into InvITs, giving HNIs exposure to assets once dominated by sovereign or pension funds.

The Role of Structured Products & MLDs

Beyond AIFs, HNIs are also embracing Market-Linked Debentures (MLDs) and other structured products. These instruments can offer capital protection, with the principal guaranteed even if markets fall. They enhance returns by linking coupons to equity indices, gold, or other assets, and allow customization for conservative, balanced, or aggressive investors. For many HNIs, MLDs represent a middle ground: safer than equities but with greater return potential than fixed deposits.

Global vs. Indian HNIs: The Catch-Up Story

Globally, HNIs and family offices allocate 40–50% of portfolios to alternatives. In India, allocations are still lower but climbing rapidly. This convergence is being driven by professional wealth managers offering global-style products, the maturation of Indian private markets with unicorns, exits, and secondaries, and regulatory support from SEBI that has made AIFs and MLDs more structured and transparent. As Indian HNIs increasingly think like their global peers, their portfolios are shifting to mirror global portfolios as well: balanced, diversified, and alternative-heavy.

The Road Ahead: Intelligent Diversification

In 2025 and beyond, HNI portfolios in India are increasingly characterized by intelligent diversification. Equities continue to form a core component, but public markets are no longer the sole driver of growth. Fixed income now plays a more discretionary role, often through instruments like MLDs rather than traditional bonds. Alternatives, spanning AIFs, private credit, real estate, and infrastructure, have shifted from niche exposures to more regular features within HNI portfolios. Secondaries, meanwhile, are emerging as an important mechanism for enhancing flexibility in private market investing.

This evolution reflects a broader change in investor behavior. Today’s HNIs are more global in outlook, selective in exposure, and strategic in allocation. The conventional reliance on equity, real estate, and fixed deposits is giving way to a more nuanced mix that may include private equity, credit, real estate funds, infrastructure, and structured products. With private wealth managers offering institutional-quality platforms, Indian HNIs are increasingly approaching portfolios in ways that emphasize both returns and resilience. Rather than chasing single bets, the modern HNI allocation framework reflects a shift toward structures designed to perform across different market environments.

Chief Brand & Investor Relations Officer

Sneha Dadrwal

Frequently Asked Questions

Q: How are HNI portfolios in India changing in 2025?

A: HNIs are moving beyond traditional assets like equities, deposits, and gold. Their portfolios now include alternatives, reflecting a more global and diversified approach.

Q: Why have AIFs become central to HNI portfolios?

A: Alternative Investment Funds provide exposure across private equity, private credit, real estate, and infrastructure. They give HNIs institutional-style access to opportunities such as pre-IPO companies, Grade A real estate, and infrastructure assets once reserved for large pensions or sovereign funds.

Q: How do secondaries improve flexibility for HNIs?

A: Secondaries allow investors to sell fund or company stakes, unlocking liquidity in otherwise long-term private market investments. This enables HNIs to rebalance portfolios, book profits earlier, and reduce concentration risk.

Q: What role do structured products and MLDs play in HNI allocations?

A: Structured products like Market-Linked Debentures provide a balance of capital protection and return enhancement. They allow customization across risk profiles, offering a middle ground between conservative debt and higher-risk equity.

Q: How do Indian HNI allocations compare with global peers?

A: Globally, HNIs allocate 40–50% of portfolios to alternatives. In India, the share is still lower but rising quickly, driven by wealth managers offering global-style products and the rapid maturation of Indian private markets.

Sources

1. Insights adapted from a leading wealth management platform in India
2. https://www.business-standard.com/finance/news/aif-commitments-surge-to-rs-14-trillion-funds-raised-cross-rs-5-trillion-125082501217_1.html