Affluent investors in India are increasingly turning to private markets as they look for smarter ways to deploy capital amid inflation and macroeconomic uncertainty. As holding cash becomes more expensive in real value terms, many are reallocating wealth toward private equity, private credit, and structured products that offer yield, diversification, and downside protection.
According to HSBC’s ‘Affluent Investor Snapshot 2025’ report, 62% of Indian high-net-worth individuals (HNIs)—defined as those with investable assets ranging from $100,000 to $2 million—plan to invest in private market funds over the next 12 months, the highest among all 12 surveyed markets.
The report also shows that Indian affluent investors reduced their share of cash allocation by 10 percentage points, the steepest decline globally. This capital is finding its way into non-traditional assets, with the share of asset allocation to alternatives doubling, and gold’s share of asset allocation rising sharply from 5% to 11%.
Based on a survey of 10,797 affluent individuals across 12 global markets, the report shows that Indian investors have made the biggest move away from idle cash. On average, they now hold just 15% of their portfolios in cash, the lowest among Asian markets.
The trend is particularly pronounced among younger investors, with Gen Z and millennials showing a stronger appetite for risk-adjusted, non-traditional investment opportunities.
“There is a notable shift among affluent individuals in India toward a more strategic approach to portfolio management. There is a growing emphasis on making money work harder over extended time horizons,” Sandeep Batra, Head of International Wealth and Premier Banking, HSBC India, said.
Batra added that the evolving mindset is driving affluent investors to diversify actively across various asset classes, including alternatives, and to explore opportunities beyond their domestic markets to both grow and safeguard their wealth. But while the numbers signal growing intent, the activity on the ground is still catching up.
Rushabh Shah, an investment banker who advises clients on private market allocations, said interest has evolved from broad curiosity to more product-led conversations. “Clients are asking about private credit, PE co-investments, and structured alternatives. The mindset has matured from ‘what is this space?’ to ‘show me credible access’,” he told DealStreetAsia.
Shah noted that younger investors, particularly those under 40, who are exploring VC and growth-stage PE, are cautious about where and how they commit capital. “They’re asking sharper questions about fund structure, exit timelines, and liquidity. The interest is real, but most are still in due diligence mode.”
A new investor base is emerging
For fund managers, this emerging class of affluent investors is becoming an increasingly important LP base, particularly as global institutions remain selective in their India exposure.
To tap into this demand, many fund managers are offering more flexible ways for affluent investors to come in, through smaller ticket sizes, co-investment opportunities, or pooled investment structures. At the same time, private banks and wealth-tech platforms are helping make these deals more accessible to younger, first-time investors.
This intent shift also mirrors the growing role of Indian family offices, many of which are emerging as active participants in the country’s private capital ecosystem.
According to PwC, there has been a surge in family offices, particularly after COVID, driven by UHNIs looking to formalise and professionalise wealth management beyond traditional promoter-business strategies.
This rise in family office activity is also closely tied to India’s younger affluent cohort, many of whom are now taking a more active role in portfolio decisions. According to PwC, startup allocations are increasingly being driven by next-gen family members who see private markets as a space to experiment, diversify, and engage with cutting-edge innovation.
As more India-focused GPs prepare to raise new vehicles in late 2025, the ability to tap into this yield-hungry, younger investor base, especially those seeking exposure to private credit or secondaries, could prove critical to achieving domestic closes.
