74% of family offices invest over 20% in alternatives: Are Indian HNIs moving beyond stocks and MFs?

Wealthy investors are increasingly looking beyond traditional stocks and bonds to private equity, private credit, real estate and infrastructure. A BlackRock survey reveals that 74% of family offices across the Americas allocate more than 20% of their portfolios to alternative investments, raising questions about how India's high-net-worth individuals (HNIs) are diversifying their wealth.

BlackRock's 2026 report, The Changing Face of Family Offices: Insights Across Generations, surveyed 206 single-family offices managing an estimated $491 billion in investable assets.

The findings show that 38% of respondents allocate more than 40% of their portfolios to alternatives, highlighting the importance of private-market investments in wealthy families' asset allocation strategies.

Why are wealthy investors increasing alternative investments?

Alternative investments include assets beyond conventional listed equities and bonds, such as private equity, private credit, infrastructure, real estate and hedge funds.

BlackRock found that established family offices typically maintain larger alternative allocations than newer ones.

Nearly 47% of family offices operating for more than 20 years allocate over 40% of their portfolios to alternatives, compared with 32% of newer offices.

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Private equity remains particularly popular. About 32% of respondents plan to increase allocations over the next 12 months, while 30% intend to raise infrastructure exposure.

However, the survey suggests that family offices are not necessarily shifting substantial amounts from public markets. Instead, they expect to finance future alternative investments primarily through existing private-market distributions and available cash.

What does this mean for Indian HNIs?

In India, wealthy investors can access alternative assets through SEBI-regulated Alternative Investment Funds (AIFs), alongside other investment structures.

Category I AIFs generally invest in sectors such as startups, infrastructure and socially or economically desirable ventures.

Category II AIFs include private equity, private credit and debt funds, while Category III AIFs may employ complex trading strategies, including leverage.

Unlike conventional mutual funds, AIFs generally require a minimum investment of ₹1 crore, subject to specified exceptions.

However, BlackRock's survey covers family offices in the Americas and does not establish that Indian HNIs have similar allocations.

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What risks should investors consider?

Higher alternative allocations can introduce significant liquidity and valuation challenges.

BlackRock found that 68% of respondents were concerned about illiquidity in private markets, while 67% identified valuation risks.

Moreover, 54% cited illiquidity as the biggest barrier to allocating additional capital to private investments.

For Indian investors, these concerns are particularly relevant because many private-market funds have long investment horizons and limited redemption opportunities.

Investors must also evaluate management fees, performance-linked charges, taxation, fund-manager track records and the underlying investment strategy.

Should Indian investors follow the trend?

Alternative assets may offer diversification and exposure to investment opportunities unavailable through listed markets.

However, their suitability depends on portfolio size, liquidity requirements, risk tolerance and investment horizon.

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The broader lesson from BlackRock's findings is not that wealthy investors should abandon equities or mutual funds, but that sophisticated portfolios increasingly combine traditional and alternative investments while carefully managing liquidity risks.