These days, where do HNIs in India want to invest
High net worth people (HNIs) make fast-paced investing decisions that go beyond simple financial gain. They look for a balance between status, purpose, and profitability. Gaining insight into these affluent individuals highlights the very varied composition of an HNI’s investment holdings.
HNIs are increasingly attracted to businesses that not only provide significant prospective returns but also correspond with their future financial aspirations, whether they be new tech enterprises or sustainability initiatives.
HNIs are looking beyond conventional assets to pursue opportunities that provide social impact and financial success, all while keeping a close eye on growth and diversification. Knowing what attracts high net worth individuals’ interest in investing may aid in portfolio strategy and development, according to Swati Saxena, founder and CEO of 4 Thoughts Finance.
An investment fund type known as an AIF makes investments in assets outside of the conventional asset class, which includes debt and equities. Potential high return AIFs include debt funds, real estate, hedge funds, private equity, and venture capital. These funds are well-liked by HNIs and are registered with SEBI. AIF investing has the potential to provide better profits in addition to providing excellent diversification advantages. These assets are more convenient for high net worth individuals (HNIs) since they are professionally managed and allow a great level of asset customisation.
Portfolio Management Services (PMS): For high net worth individuals, portfolio management services provide a profitable avenue for investing. This is as a result of the customized investment options it offers to this particular investor class. Professional portfolio managers oversee the investments, which might provide higher returns than the market. According to Saxena, PMS are customized to satisfy specific requirements such as time-frame, expected return, and risk tolerance.
Unlisted Stock
HNIs are also making investments in unlisted shares, also referred to as pre-IPO equities. These shares are purchased and sold on the Over-the-Counter (OTC) market rather than being traded on the stock exchange. Purchasing unlisted shares gives investors first access to cutting-edge companies that prioritize innovation, technology, and original business concepts. HNIs may also buy the required number of shares according to their capacity for investment, which they might not be able to do during an IPO if reduced allocations are caused by oversubscription.
INvITs & REITs
For a long time, many people, Indians in particular, have preferred making real estate investments. However, because of the large ticket sizes and low liquidity, they have been fraught with difficulties. On the other hand, investors may now engage with less capital requirements and more liquidity thanks to new investment choices like INvITs and REITs. According to Saxena, SEBI has also recently reduced the minimum investment values for INvITs and REITs, making them more accessible to the public.
Unique Investments
HNIs are also drawn to exotic assets that increase in value because they provide them with substantial profits in addition to a lavish lifestyle. Expensive art pieces and high-end timepieces are two admirable unconventional investment alternatives that high net worth individuals can consider.
