Indian family offices are putting up to 45% of their portfolios into alternatives: where is the money going?

Indian family offices are moving decisively beyond traditional investments, with 40–45% of allocations at many family offices now directed towards alternative assets such as private equity, venture capital, private credit, AIFs, REITs and InvITs. The shift reflects a broader change in investment philosophy, as wealthy families increasingly prioritise wealth creation and strategic capital deployment over simply preserving existing wealth.

The EY–Julius Baer Indian Family Office Playbook: Now, Next and Beyond notes that family offices were traditionally concentrated in domestic equities, fixed income and real estate, with capital often reinvested into family businesses.

As wealth pools have expanded, however, families have increasingly turned to private markets to seek higher risk-adjusted returns and create long-term value.

Private equity and venture capital are among the key beneficiaries of this shift. Dedicated allocations of 10–20% or more towards PE and VC are becoming increasingly common, according to the report.

Family offices are also backing entrepreneurs in emerging sectors and, in some cases, are operating almost like private-capital platforms themselves.

Private credit and AIFs gain traction

The search for alternatives extends beyond equity investments. Private credit and alternative investment funds (AIFs) are becoming part of the broader diversification strategy.

With the report highlighting limited return potential from traditional debt instruments, family offices are increasingly looking at private credit and other alternative funds as avenues for long-term capital deployment.

The alternatives bucket also includes REITs and InvITs, providing exposure to real estate and infrastructure without relying solely on direct ownership of physical assets.

Direct deals and co-investments rise

Another notable development is the growing appetite for direct investments and co-investments.

Rather than allocating exclusively through PE and VC funds, family offices are increasingly investing directly in startups and unlisted growth companies or co-investing alongside funds. This can give them greater strategic involvement and access to early-stage value creation opportunities.

The report says investment themes include technology, healthcare, renewables, consumer businesses and selective global real estate platforms.

AI and infrastructure emerge as key themes

Family offices are also looking towards sectors expected to shape India’s future economic growth. These include artificial intelligence, renewable energy, cloud infrastructure and data centres, alongside other emerging investment themes.

This diversification marks a significant departure from portfolios historically anchored in equities, fixed deposits, gold and real estate.

Greater sophistication, greater risks

The growing exposure to private markets also brings greater complexity. Private equity, venture capital, real estate, hedge funds and newer alternatives each have different risk profiles, investment cycles and due-diligence requirements.

The report therefore highlights the need for family offices to professionalise investment capabilities, strengthen networks and adopt data-driven decision frameworks to navigate an increasingly competitive private-market landscape.

For India’s family offices, alternatives are no longer a peripheral allocation. They are increasingly becoming a core part of the strategy for building and deploying multigenerational wealth.