AIFs, PMS, Private Credit, REITs and InvITs Are Gaining Traction Among Retail HNIs

For years, Indian retail HNIs relied on mutual funds, fixed deposits, insurance-linked plans and traditional real estate. But everything began to change as investors started looking for stability, better diversification and more predictable long-term outcomes.

Today, AIFs, PMS, private credit, REITs and InvITs are gaining strong traction among retail HNIs who want more control, more visibility and more professional management of their wealth. The shift is driven by rising financial awareness, better regulations, and a strong desire to participate in opportunities earlier reserved for ultra-high-net-worth families.

This article breaks down why these products are becoming popular, what is changing in investor behaviour, and how these assets fit into a modern wealth strategy.

Why Retail HNIs Are Moving Beyond Traditional Investments?

1. The Search for Consistent and Predictable Returns

Market volatility has pushed investors to look for asset classes that offer steady income or smoother performance.

• Private credit gives fixed income like stability with higher yields.

• REITs and InvITs deliver rental-like cash flows without the headache of property management.

• PMS strategies offer sharper research and active management.

For an HNI looking for dependable growth or income, these products fill the gap.

2. Better Access and Lower Entry Barriers

A decade ago, these products were harder to access. Today, minimum ticket sizes in many AIFs and PMS options are still high, yet more platforms, distributors and wealth managers are helping retail HNIs participate with clearer information and structured guidance.

REITs and InvITs now trade on exchanges like equity, making them accessible even to smaller portfolios.

3. Strong Performance and Data-Backed Confidence

Many of these alternative assets have delivered attractive long-term results.

For example:

• Listed REITs in India have offered yields in the range of 6 to 8 percent along with capital appreciation.
• Private credit AIFs have historically targeted double digit yields.
• PMS equity strategies often outperform broader indices due to active research and concentrated portfolios.

Investors are noticing that these strategies work well when combined with a long-term horizon.

4. Demand for Diversification Across Multiple Asset Classes

Wealthy investors no longer want all their capital in equity and real estate.

Alternatives provide:

• Lower correlation with equity
• Stability during market stress
• Multi-year return predictability

This gives portfolios better balance and reduces the emotional stress of market volatility.

A Closer Look at Each Product Class

1. Alternative Investment Funds (AIFs)

AIFs offer exposure to strategies like private equity, venture debt, private credit, structured credit and long short funds. They are designed for sophisticated investors who want higher risk adjusted outcomes.

Why HNIs are opting for AIFs:

• Access to institutional grade investment opportunities
• Better downside management
• Long-term wealth compounding through specialised strategies

2. Portfolio Management Services (PMS)

PMS gives investors a personalised and actively managed equity portfolio. This appeals to HNIs who want a customised approach rather than a standardized mutual fund structure.

What retail HNIs like:

• Stock level transparency
• Dedicated fund manager oversight
• Potential for alpha generation

3. Private Credit

Private credit has become one of the fastest growing categories among HNIs. It offers steady returns through lending to companies that need flexible capital.

Why it is booming:

• Consistent income
• Lower volatility
• Often backed by collateral which provides comfort

In a world where interest rates move unpredictably, private credit offers stability.

4. REITs

Real Estate Investment Trusts allow investors to own income generating commercial property in a fractional form. Listed REITs pool leases from office parks, malls and warehouses.

What draws HNIs to REITs:

• Rental income
• Professional management
• High quality commercial assets
• Liquidity through exchange listing

5. InvITs

Infrastructure Investment Trusts are similar to REITs but focus on assets such as roads, transmission lines, towers and renewable energy.

Why InvITs work well for HNIs:

• Predictable cash flow from long term contracts
• Government backed or regulated revenue models
• Lower sensitivity to market cycles

What this Trend Says About Indian Investors?

The rising interest in AIFs, PMS, private credit, REITs and InvITs shows that retail HNIs are becoming more sophisticated and more long-term oriented. They want diversification, transparency, institutional quality management and simplified access.

Most importantly, they want wealth strategies that can weather uncertainty and protect purchasing power over decades, not just across market cycles.

How Retail HNIs Can Use These Products Together?

A simple example portfolio for a ₹5 crore HNI could include:

• 30 percent PMS for long-term equity growth
• 25 percent private credit for income
• 20 percent AIFs for specialised opportunities
• 15 percent REITs for real estate backed cash flow
• 10 percent InvITs for stable infrastructure income

This creates a blended portfolio that grows, protects and pays.

Conclusion

The rise of AIFs, PMS, private credit, REITs and InvITs among retail HNIs is not a trend that will fade soon. It reflects a deeper shift in the Indian wealth landscape where investors seek stability, sophistication and structure. As awareness improves and regulations strengthen, these products will likely become core building blocks of long-term wealth creation.

Retail HNIs who take a diversified and disciplined approach stand to benefit the most from this new era of alternative investing.

FAQs

1. Why are these products becoming popular among retail HNIs?

They provide diversification, steady income, long-term growth potential and institutional grade management.

2. Are AIFs risky for first time HNI investors?

AIFs involve specialised strategies and may carry higher risk. With the right category and guidance, they can play an important role in long-term wealth creation.

3. Are REITs safer than direct real estate?

REITs offer diversification and professional management which reduces risk compared to owning a single property.

4. Can private credit replace fixed deposits?

Private credit offers higher returns but also comes with different types of risks. It is not a direct replacement but works well as part of a broader income strategy.

5. Who should invest in InvITs?

Investors who want predictable cash flows from infrastructure assets without managing them directly may find InvITs attractive.