India's alternative investment market could grow more than five-fold to surpass $2 trillion by 2034. According to a report released by EY and Julius Baer, the expansion is expected to be driven by rising participation from high-net-worth investors and a growing demand for higher-yielding, less-correlated assets that channel greater capital into private markets.
Currently, India's alternative investment assets are estimated at approximately $400 billion. This figure includes $156 billion held in SEBI-registered Alternative Investment Funds (AIFs), with the remaining balance stemming from offshore vehicles, family offices, and unlisted structures.
The projected market expansion coincides with a broader shift in how Indian family offices deploy capital. The report indicates that these entities are moving away from passive investing. Instead, they are increasingly participating as limited partners in private equity and venture capital funds, alongside pursuing co-investments and direct investments.
Family offices have emerged as one of the most transformative forces shaping India's private capital ecosystem, according to the report. They are leveraging their sector knowledge and long-term investment horizons to back emerging businesses and new ventures.
The investment focus of these family offices is also diversifying. Capital is increasingly moving toward sectors such as artificial intelligence, climate technology, renewable energy, digital infrastructure, energy storage, semiconductors, electronics manufacturing, cloud services, and data centres, while real estate remains an important investment area.
This strategic shift is supported by India's growing wealth pool. The report highlights that the country was home to more than 19,000 ultra-high-net-worth individuals, a figure projected to exceed 25,000 by 2031. Furthermore, the estimated number of family offices has expanded from around 45 in 2018 to nearly 300 by the 2024-25 period.
As their investment strategies become increasingly institutionalised, family offices are expected to play a larger role in long-term capital formation. The report notes that stronger governance, technology adoption, professional talent, and data-led decision-making will become increasingly critical as these investors broaden their footprints across alternative funds, private equity, venture capital, and pre-IPO opportunities.
"The projected growth of India's alternative investment market to over $2 trillion reflects a maturing domestic financial ecosystem. The transition of family offices from passive participants to active limited partners, direct investors, and co-investors marks a significant evolution in private capital deployment. As these entities increasingly institutionalize their operations and direct capital into sectors like technology, renewable energy, and infrastructure, founders and emerging businesses will have access to deeper pools of long-term domestic capital." — Dr. Shishir Gupta, Founder & CEO, StartupLanes
