HNIs Boosting Allocations to REITs, InvITs, and Private Equity: Expert Insights
Shiv Gupta, founder and CEO of Sanctum Wealth, shares insights on the increasing trend of high-net-worth individuals (HNIs) and family offices diversifying their investments into alternative assets like commercial real estate, REITs, InvITs, private credit, and private equity. He also discusses the outlook for the Indian stock market in H2FY26, the boom in the wealth management sector, and the strategic importance of gold and bond investments.
HnisReitsInvitsPrivate EquityWealth ManagementReal Estate NewsOct 10, 2025
In an interview with Mint, Gupta provided his outlook for the Indian stock market in the second half of the current financial year (H2FY26). He noted that while the Nifty 50 has been largely flat over the past year, the Indian market has under-participated in the global rally due to high valuations, muted earnings growth, and the absence of fresh triggers. However, with supportive macroeconomic conditions and more reasonable valuations, Gupta expects a gradual recovery in the markets.
He predicts a 'slow march' forward for the markets, more like an escalator than an elevator, led by domestic consumption-oriented and quality growth stocks rather than a broad-based rally. Key tailwinds include real GDP growth expectations of around 6.8%, inflation trending below 5%, and prospects for a rate-cut cycle of 50-75 bps as global conditions ease. These factors are underpinned by robust domestic liquidity, with monthly SIP inflows exceeding ₹20,000 crore, and strong long-term investor sentiment.
However, headwinds such as external economic and geopolitical shocks, as well as India's still-high valuations, pose risks. Despite these challenges, Gupta remains optimistic about the long-term prospects of the Indian market.
The boom in India's wealth management sector is a structural transformation, driven by sustained economic growth, financialization, and the expansion of capital markets. Three key forces are shaping this transformation: sustained economic growth and wealth creation, financialization with savings migrating from gold, real estate, and deposits into mutual funds, equities, and alternatives, and the expansion and deepening of capital markets. This creates significant opportunities across the wealth pyramid, from emerging affluent clients to ultra-high-net-worth families.
While competition in the wealth management sector is intense, the market is expanding fast enough for multiple models to thrive. The industry is witnessing rapid capacity building and rising sophistication, although there remains a need for deeper investment in people, fiduciary standards, and technology.
Gupta advises that in the current market conditions, asset allocation and diversification remain paramount. Over the next couple of years, index-level returns may be modest, around 7-8% CAGR, but this creates opportunities for active managers to generate alpha through careful stock and sector selection. Quality large caps, select midcaps, and global diversification can enhance both resilience and return potential.
Family offices and HNIs are increasingly looking to alternative assets for efficient diversification. With Indian equities expected to deliver muted near-term returns and fixed income facing higher taxation, these investors are exploring commercial real estate, REITs, InvITs, private credit, and private equity. Gold and silver, while fundamentally strong, have already seen significant rallies. Historically, Indian HNIs have remained domestically concentrated, but recent underperformance of Indian equities has increased interest in overseas assets, particularly US equities, with a focus on AI-focused technology leaders and diversified global ETFs.
Gold has outperformed this year, rising more than 30% in the last six months. Central bank buying, rising ETF inflows, and concerns over U.S. stagflation have driven this rally. Despite a brief pause in July, central banks added 15 tonnes of gold in August, and ETFs posted their third straight month of inflows. With signs of a U.S. slowdown, persistent inflation, and a softer dollar, gold's long-term fundamentals remain supportive, though some near-term consolidation is likely. In their model portfolio, Sanctum Wealth is booking partial gains while remaining overweight in gold for strategic reasons. At the same time, they are raising equity exposure, given reasonable valuations in quality domestic consumer-facing companies and a likely earnings recovery through FY26.
Bonds are a core part of most client portfolios, providing stability, liquidity, and income. However, traditional debt instruments can be tax-inefficient for investors in higher tax brackets. HNIs are increasingly favoring tax-optimized options such as REITs, InvITs, income-plus-arbitrage strategies, equity savings schemes, and newly launched hybrid SIFs. Those with higher risk appetites continue to explore private credit and venture debt.
In summary, the wealth management sector in India is undergoing a significant transformation, driven by economic growth, financialization, and the expansion of capital markets. HNIs and family offices are diversifying their investments into alternative assets to enhance returns and reduce risks. While the Indian stock market may see a gradual recovery in H2FY26, strategic asset allocation and diversification remain key to long-term success.
Frequently Asked Questions
What are the key alternative assets HNIs are investing in?
HNIs are increasingly investing in alternative assets such as commercial real estate, REITs (Real Estate Investment Trusts), InvITs (Infrastructure Investment Trusts), private credit, and private equity to diversify beyond traditional holdings like equities, fixed income, gold, and silver.
What is the outlook for the Indian stock market in H2FY26?
The outlook for the Indian stock market in H2FY26 is cautiously optimistic. Expect a gradual recovery, more like an escalator than an elevator, led by domestic consumption-oriented and quality growth stocks rather than a broad-based rally.
What are the key drivers of the wealth management sector in India?
The key drivers of the wealth management sector in India are sustained economic growth, financialization, and the expansion of capital markets. These factors are creating significant opportunities across the wealth pyramid, from emerging affluent clients to ultra-high-net-worth families.
Why are HNIs looking at overseas assets, particularly US equities?
HNIs are looking at overseas assets, particularly US equities, due to the recent underperformance of Indian equities. They are focusing on AI-focused technology leaders and diversified global ETFs to enhance their returns and diversification.
What is the role of bonds in a diversified portfolio?
Bonds play a crucial role in a diversified portfolio by providing stability, liquidity, and income. For higher tax bracket investors, tax-optimized options such as REITs, InvITs, income-plus-arbitrage strategies, and equity savings schemes are increasingly favored.
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