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Edelweiss Insights Private equity funds are the second most preferred asset class for India’s super rich

Private equity funds are the second most preferred asset class for India’s super rich

Over 66% of India’s super-rich have increased their investment in private equity funds in the past one year, says a Knight Frank report.
Team Cafemutual Mar 12, 2018

A study by Knight Frank shows that India’s super rich are increasing their exposure to private equity funds.

Around 66% of super-rich Indians, with assets more than $50 million, have increased their exposure to private equity funds. The report shows that private equity funds are the second most preferred asset class among ultra HNIs after equity.

Alternative investment funds followed private equity funds. The study shows that over 48% of India’s ultra HNIs have increased their exposure to alternative investments. Here, alternative investment funds exclude private equity funds.   

Samantak Das, Chief Economist and National Director - Research, Knight Frank India, says that India’s super rich are looking out for new investment avenues due to lacklustre performance of real estate and gold. “The inclination to invest in property is lower for the ultra-wealthy Indians compared to their global peers. Only 23% wealthy Indians are interested to invest in property (excluding a primary residence and secondary home) in India compared to 43% globally,” Samantak said.

The wealth report believes that the stretched global equity market is also the main driving force behind the interest of the world’s super rich in alternative assets. “There are worries around perceptions of stretched valuations across many publicly traded bonds, while record-breaking equity markets are making some nervous. As a result, money is moving towards alternative investments, with real estate a prime target for a large proportion of this capital because of its relatively high yield,” the report stated.

However, India’s super rich are bullish on equities. Around 95% of the respondents have increased their allocation to equities compared to just 62% of the global average, the study found.

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