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Alpha generation is the topmost priority for HNIs and ultra HNIs to invest in AIFs, shows a report from Indian Venture and Alternate Capital Association (IVCA).
73% HNIs and ultra HNIs invest in AIFs in the hope of generating alpha. Portfolio diversification comes second with 64% investors placing it as a key priority.
Leveraging emerging markets is another key reason for the wealthy to invest in AIFs. According to the report, 45% investors said capitalizing on emerging opportunities as their main reason to invest in AIFs.
Interestingly, many wealthy investors also use AIFs for risk management. According to the report, 27% investors said that reducing overall portfolio risk as their main priority for investment in AIFs while 9% also use these funds to primarily manage portfolio volatility.
The report also said that wealth preservation and its growth are the two main goals of HNIs and UHNIs for investment in AIFs.