Alternative investments to gain more traction in India: Experts

India’s alternative investment market is poised for rapid growth as family offices, corporates and institutional investors increasingly turn to these instruments in search of higher returns with relatively lower risk and volatility compared to equities, according to industry experts.  An alternative investment is an asset that does not fit into the categories of conventional equity income or cash. Venture capital, hedge funds, real estate and commodities are examples of alternative investments.  Speaking at an event organised by Venture Soul Partners and Spur Advisors, President (Finance and Strategy) at Atha Group, Vishal Vithlani, highlighted the sector’s explosive global growth, with the private debt market estimated at USD 2.5 trillion, half of India’s current GDP.  Highlighting the broader growth in this segment, SEBI Whole-Time Member Ananth Narayan said, 

 

“Perhaps something that is less noticed is the growth in the Alternate Investment Funds (AIFs), much of which is invested in the unlisted space.”  As of March 2025, commitments into AIFs stood at Rs 13.5 lakh crore, a growth of over Rs 1.7 lakh crore over the previous year, he said..  “Over the past five years, t • * AIF commitments and investments have seen a 30 per cent Compounded Annual Growth Rate, heartening signs for capital formation,” Narayan said.  In India, the segment is still nascent but is projected to grow nearly tenfold from Rs 25,000-40,000 crore in FY23 to Rs 2 lakh crore by 2027, Vithlani said.