Indian Wealthy Shift Focus to Real Estate and Infrastructure Amid Moderate Stock Returns

Wealthy investors in India are increasingly pivoting their portfolios toward high-yielding alternative assets, including real estate, logistics, and infrastructure. This shift follows a period of lackluster returns in the public equity markets compared to historical gains.

Data shows that at least six new vehicles launched this year are seeking to raise more than $1.25 billion for real estate and infrastructure assets. This trend marks a resurgence for asset classes that previously experienced slower growth in the region.

The move contrasts with global trends where many well-heeled investors continue to favor public equities and stocks benefiting from the artificial intelligence boom. According to a global family office report by Citi, international family offices direct more capital toward public equities while maintaining private market exposure. In contrast, an August report by Julius Baer and EY India noted that many Indian family offices now allocate 40% to 45% of their portfolios to alternatives, including private credit, venture capital, REITs, and Infrastructure Investment Trusts.

Ashish Kehair, chief executive officer of PAG-backed Nuvama Wealth Management Ltd., noted a growing preference for private credit and cash-flow generating assets. The Mumbai-based firm, which oversees $39 billion in client assets, recently raised around $420 million for a commercial real estate fund in partnership with Cushman & Wakefield Management. Kehair stated that the firm plans to launch additional funds focused on income-generating properties and infrastructure.

The shift is partly attributed to recent equity market performance. The benchmark Nifty 50 index has delivered total returns of approximately 7% over the past two years, compared to 29% in the S&P 500 index. Consequently, money raised by Alternative Investment Funds in India from local investors nearly doubled to $64.5 billion between March 2024 and June 2026.

Local real asset funds typically target annual returns of 12% to 15%, outpacing the yields of under 8% seen on three- to five-year AAA-rated corporate bonds. However, actual returns fluctuate based on underlying assets, leverage, and exit valuations.

Karan Shah, head of fixed income and real assets at Neo Wealth, explained that these real-asset funds were historically restricted to institutional investors like pension managers and large private equity funds due to high risks and large ticket sizes. Today, wealthy investors participate through specialized fund vehicles. In July, Neo Wealth raised approximately ₹1040 crore ($110 million) for its Real Asset Yield Fund to invest in REITs and infrastructure investment trusts, alongside more than $500 million raised across two tranches of its Neo Infra Income Opportunities Fund.

Additionally, alternative asset manager EAAA India Alternatives Ltd. listed in Mumbai this month, overseeing nearly $5.2 billion in fee-paying assets as of June, with approximately $3 billion managed within its real-assets funds.

"The notable shift of capital toward real estate and infrastructure assets in India highlights a maturing investor base seeking portfolio diversification. As public equities experience moderate momentum, family offices and high-net-worth individuals are looking beyond traditional stocks and fixed deposits toward cash-flow-generating alternatives. This trend reflects a strategic reallocation to manage market volatility and secure stable, long-term yields through structured alternative investment vehicles." — Dr. Shishir Gupta, Founder & CEO, StartupLanes