Why India’s Ultra-HNIs Are Doubling Down on Alts

The truly wealthy don’t just chase returns, they look for the kind of access that compounds over time. And right now, that access is quietly shifting from the visible public markets to the private ones. In a world obsessed with IPOs and stock tickers, India’s Ultra-HNIs are placing their biggest, most strategic bets elsewhere – into private equity, venture capital, secondaries, and real assets that don’t scream for attention but quietly build value.

According to Kotak’s Top of the Pyramid 2024 report, India’s wealthiest families are allocating nearly a fifth – 18% – of their portfolios to alternatives. This is not a dabble. It’s a deliberate shift. A signal that the most sophisticated investors in the country believe the best opportunities no longer come dressed in ticker symbols. Private markets are no longer niche.

Public equity still commands the largest chunk at 32%, and real estate follows at 29%, but the growth story lies in that 18% slice going to alternatives. That’s where the capital is moving. Not because alternatives are trendy, but because they’re increasingly where value is created before the rest of the world notices. In a landscape where public markets are efficient to a fault, where everyone has the same data and the same access, private markets offer a rare edge: the chance to get in early, and exit before the crowd rushes in.

This is especially true of secondaries, the quiet star of private market investing. While early-stage VC might offer excitement, secondaries offer something even more coveted – visibility. They don’t eliminate risk, just reduce blind spots. They let investors come into a fund or portfolio mid-cycle, when the fog has lifted and outcomes are more predictable. In an environment of higher interest rates and economic uncertainty, secondaries give India’s Ultra-HNIs the two things they value most: shorter durations and lower blind spots. These are not speculative bets. They’re calculated allocations with clear IRR potential and exit paths.

It helps that secondaries often unlock entry into top-performing funds that would otherwise be inaccessible. Think of them as the backdoor to the most exclusive rooms in finance, rooms where decisions are made, deals are seen first, and returns are more aligned with the pulse of innovation.

The same strategic rigor is playing out in real estate. While historically Indian HNIs have gravitated toward residential real estate, that too is changing. Commercial real estate, once limited to a handful of high-rises and industrial parks, is seeing a renaissance, especially through structured vehicles like REITs and InvITs. These instruments offer income, diversification, and liquidity, without the operational headaches of direct ownership. That’s the new luxury: efficiency without compromise.

Interestingly, this isn’t just about India anymore. A growing portion of Ultra-HNIs are going global with their travel, their children’s education, and now, with their investments. Global real estate, especially in markets like the US, UK, Singapore, and the UAE, is becoming a serious component of family portfolios. Part migration strategy, part diversification hedge, and part aspirational living – these choices reflect a growing comfort with cross-border capital movement, enabled by the Liberalised Remittance Scheme (LRS) and favourable RBI guidelines.

But behind all these moves lies something deeper. This isn’t just about yield curves or market cycles. It’s about identity. Private markets are where control meets aspiration. They give families a sense of intentionality of backing businesses they believe in, of building a legacy through quiet conviction, not noisy speculation. The allure is not only financial. It’s emotional. Investing in a pre-IPO growth story, co-investing with a top-tier GP, or entering a secondary position in a high-performing fund – all signal something. That you’re not just rich. You’re informed. Connected. Early.

The idea of “access as alpha” is not new. But never has it been this potent. In a time when everyone has a demat account, real power comes from what’s not easily available. The best funds aren’t advertising on YouTube. The best opportunities don’t come with glossy brochures. They come through relationships, through platforms and partners that curate, underwrite, and invite, not sell.

As India’s wealth base expands and matures, this kind of investing is no longer limited to family offices in Mumbai and Delhi. Tier 2 cities are rising. Entrepreneurs in Ludhiana and Raipur are asking different questions now, not just how to preserve wealth, but how to build it intelligently. Private markets offer a compelling answer. They’re where long-term capital finds long-term ideas. Where patience is rewarded. And where the smartest rupee gets multiplied, not with speed, but with intent.

There’s a quiet revolution underway. It’s not on the front pages or in TV debates. But it’s happening in investment portfolios, in family councils, in wealth manager briefings, and on the balance sheets of the wealthy. And if you look closely, you’ll notice a pattern. The wealthiest are not waiting for the next IPO to create value. They’ve already invested in it, years ago, privately.

Source: Kotak Top of the Pyramid 2024 report

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