India’s Alternative Investment Market Could Reach USD 2 Trillion By 2034, Julius Baer-EY Report Finds

New Delhi: India's alternative investment market could potentially expand to exceed USD 2 trillion by 2034, according to a recent report by EY and Julius Baer. The current value of India's alternative investment assets is approximately USD 400 billion, which includes USD 156 billion in SEBI-registered Alternative Investment Funds (AIFs). The remainder is made up of offshore vehicles, family offices, and unlisted structures.

The report suggests that this growth is largely due to rising participation from high-net-worth investors and the demand for assets that offer higher yields and less correlation to traditional markets. Furthermore, the report predicts that family offices will play an even more significant role in India's capital formation as their investment strategies become more institutionalized.

Family offices are currently transitioning from passive investing to actively participating as limited partners in private equity and venture capital funds, as well as pursuing co-investments and direct investments. They are also leveraging their sector expertise and long-term investment horizon to back emerging businesses and new ventures.

Some of the areas where family offices are focusing their investments include artificial intelligence, climate technology, renewable energy, digital infrastructure, energy storage, semiconductors, electronics manufacturing, cloud services, and data centers.

Moreover, the report highlights that India currently has over 19,000 ultra-high-net-worth individuals, with this number expected to surpass 25,000 by 2031. The number of family offices has grown from around 45 in 2018 to nearly 300 by 2024-25. As these investors become more institutionalized, their focus on long-term capital formation will be strengthened by stronger governance, technology, professional talent, and data-led decision-making.