The shift does not mean traditional assets are disappearing.
Instead, different asset classes are being considered for different purposes, from growth and income to liquidity, hedging and diversification.
Equities remain the growth engine
Equities continue to occupy a central position in HNI portfolios.
Chirag Mehta, Founding Partner, Arbour, an investment management firm, said equities remain the “growth engine”, but investors are looking at how portfolios could behave during difficult market conditions and seeking steady cash flows alongside equity exposure.
Within equities, investors are also becoming more selective.
Ankit Patel, Co-Founder & Partner at Arunasset Investment Services, a boutique financial advisory and wealth management firm, said there is greater interest in mid- and small-cap strategies, PMS and differentiated active strategies.
Global exposure is another area gaining attention.
Tajinder Virk, Co-Founder & CEO of Finvasia Group and Dealing.com, a global, multi-asset investing and trading platform backed by the Finvasia Group, said HNIs are looking at global equities alongside domestic investments to diversify across geographies, currencies and economic cycles.
Debt, gold and real estate continue to have a role
Debt is being used for stability, predictable income and liquidity, according to Shrikant Goyal, Managing Director, Getfive Funds, a SEBI-registered Category-I Alternative Investment Fund (AIF) managed by Getfive.
Gold continues to serve as a hedge and portfolio diversifier.
Patel said gold has become a more meaningful strategic diversifier, while Virk said investors are showing greater interest in financial and digital forms of gold.
Real estate remains important in HNI portfolios, although investors have more avenues beyond direct property ownership.
Patel said REITs, real-estate funds and structured vehicles are increasingly being used alongside physical real estate.
The nature of direct-property demand is also changing in some segments.
Pradeep Aggarwal, Founder and Chairman, Signature Global (India) Ltd, a real estate development company in India, said HNI demand remains strong in select micro-markets and branded residences. At the same time, he cautioned that real estate is not a liquid asset and investors need to factor in longer holding periods.
Alternatives are becoming a bigger part of the portfolio
The more notable change is the growing interest in alternative investments.
These include private credit, alternative investment funds (AIFs), private equity, venture capital, PMS, co-investments and other private-market strategies.
Goyal cited the latest Julius Baer–EY India family-office study and said alternatives, including PE, VC, private credit, AIFs, REITs and InvITs, account for around 40–45% of allocations in many family offices.
Saket Lakhotia, Co-founder & Group CEO, Daksham Capital, a multi-family office, private banking, and wealth management firm, said allocations to alternatives in some family-office portfolios are moving from earlier levels of around 10% towards 25%.
Private credit is also seeing increased activity.
Mehta cited EY data showing $12.4 billion of private credit deals in India in 2025, up 35%, with real estate leading.
Virk said private markets, long-short strategies and real-world assets are also attracting attention. He added that investors looking at tokenised assets need to examine legal ownership, custody, investor protection and regulatory clarity.
Before investing, start with liquidity
For investors considering alternatives, one of the first questions is how long they can leave the money invested.
“Before allocating to alternatives, investors should first ask what role the investment plays in the portfolio and how much capital they can afford to keep patient,” Goyal said.
Alternatives can have lock-ins or limited exit opportunities, making it important to match the investment horizon with the investor’s liquidity requirements.
Patel said investors should not allocate money that may be required for near-term goals or emergencies. Lakhotia also highlighted the need to understand lock-in periods and exit mechanisms.
Don’t judge private credit by the coupon alone
The headline return is only one part of the assessment for private-market investments.
For private credit, Mehta said investors should look beyond the coupon and examine collateral, cash-flow coverage and legal documentation.
Patel similarly highlighted borrower quality, collateral, covenants and recovery mechanisms, along with the manager’s underwriting discipline.
The manager’s experience and track record are relevant across alternatives. Patel said investors should examine performance across market cycles and whether the manager has invested its own capital alongside clients.
Valuation and governance need closer attention
Alternative investments can involve less frequent price discovery than listed securities. That makes valuation methodology, reporting and transparency important considerations.
Lakhotia said investors should examine the quality of disclosures, valuation methodology and reporting practices.
Virk said investors should understand what they legally own, who holds the assets, how custody is structured and what recourse exists in case of a default.
The costs associated with an investment also need to be understood. These can include management fees, performance fees and carry, apart from taxation and other charges.
Diversification is about underlying risks too
Adding an alternative investment does not necessarily mean a portfolio has become more diversified.
“If multiple assets are exposed to the same economic or credit cycle, the underlying concentration remains,” Virk said.
That makes it important to look through the investment structure and understand the underlying assets and risks rather than assessing diversification only by the number of products held.
For HNIs, the allocation decision ultimately involves assessing the investment’s role in the portfolio, the time for which capital can remain invested, the underlying risks, the manager, costs, valuation, governance and exit options.
To understand, alternatives should complement a core portfolio of liquid assets rather than replace it.