Ultra-HNI Investment Patterns

Even as global economies struggled – grappling with high post-pandemic inflation and geopolitical conflicts with no end in sight - Indian businesses have shown resilience.

India's financial markets have performed exceptionally well, outperforming most international markets in the long run and achieving significant milestones in the short-term, with the Nifty-50 index reaching ‘record highs’ 59 times in 2024, surpassing its previous best of 58 times in 2021.[14]

TOPIC 1

Surge in IPOs

01. Surge in IPOs

Coming in a distant second, ‘Sale of Primary Business’ was cited as the primary source of wealth by 14% of the Ultra-HNIs surveyed. Fundraising activities in India reached extraordinary levels in late 2023 and 2024.

61% of Ultra-HNIs surveyed in the Kotak Private TOP 2024 Survey cited ‘Profits from Business’ as their primary source of wealth. These Indian businesses stand to benefit the most from a combination of a young and growing workforce, steady foreign investments and strong domestic demand and consumption – a bright spot in an otherwise overcast global economic landscape.

Sources of Wealth (%) Base: 150

  • a.Profits from Business
  • b.Sale of Primary Business
  • c.Investments
  • d.Salary Income
  • e.Inheritance
  • f.Real Estate
  • g.Others

TOPIC 2

Equity is (Still) King

02. Equity is (Still) King

Coming in third, ‘Investments’ was cited as the primary source of wealth by 13% of the Ultra-HNIs surveyed, with 1 in every 5 Professionals sourcing their wealth primarily from investments.

Base: 150

Broadening investor base through increased retail participation has provided a solid foundation for the Indian financial markets
62%

Ultra-HNIs surveyed perceived their approach to investing to be aggressive

02. Equity is (Still) King

Individual stocks and shares are the preferred instrument with over 89% of Ultra-HNIs including it in their top three within the equity asset class

Besides domestic markets, Ultra-HNIs are also increasing their investments in global equity markets, with the US being the preferred market. This is unsurprising as the US is the only major global market to have outperformed India over the last decade. Nearly a third of all Ultra-HNI Global Investors surveyed are invested in US equity.

Top Instruments in Equities (%) Base: 150

  • a.Stocks and Shares
  • b.Mutual Funds
  • c.Portfolio Management Schemes
  • d.ETFs
  • e.ULIP/Insurance
  • f.Unlisted Equity

02. Equity is (Still) King

Top Instruments in Equities (%)

Base: 150

  • Top 1 Rank
  • Top 2 Rank
  • Top 3 Rank
  • Not Stated

Top Instruments in Equities (%)

Stocks and Shares - TOP 89%

53% 26% 11% 11%

Mutual Funds - TOP 83%

24% 41% 18% 17%

Portfolio Management Schemes - TOP 55%

15% 11% 29% 45%

ULIP/Insurance - TOP 40%

4% 13% 23% 60%

Unlisted Equity - TOP 15%

3% 5% 7% 85%

ETFs - TOP 13%

2% 3% 7% 87%

TOPIC 3

The Appeal of Commercial Real Estate, REITs and InvITs

03. The Appeal of Commercial Real Estate, REITs and InvITs

Real Estate followed Equities as the preferred asset class, making up, on average, 29% of the Ultra-HNIs investment portfolio. Commercial and residential real estate were equally represented in the Ultra-HNIs Top 3 lists in this category, with 45% of the surveyed Ultra-HNIs selecting commercial properties as their most-preferred asset, compared to 33% who favoured residential properties. Commercial Real Estate often offers higher rental yield, more attractive leasing terms and longer lease contracts. However, preferences vary based on individual investment strategies and personal goals.

Ultra-HNIs have also shown an interest in foreign real estate. Interest in foreign real estate may be linked to migration plans. More than half of the Ultra-HNIs that are in the process of migration or intend to migrate, have already invested in residential real estate abroad.

03. The Appeal of Commercial Real Estate, REITs and InvITs

Top Real Estate Assets (%) Base: 150

  • a.Commercial Properties
  • b.Residential Properties
  • c.Global Real Estate
  • d.ReIT (Real Estate Investment Trusts)
  • e.InvITs (Infrastructure Investment Trusts)
  • f.GIFT City
  • g.Not Stated

38% and 21% of Ultra-HNIs conveyed a preference for REITs and InvITs, respectively, within the Real Estate asset class. These assets allow Ultra-HNIs to invest in real estate or infrastructure projects via an intermediary that generates dividends for them without having to invest directly in the project.

35%

Global investors surveyed had foreign
Commercial Real Estate in their porfolios

47%

Invested in Residential Properties abroad

03. The Appeal of Commercial Real Estate, REITs and InvITs

Top Real
Estate Assets (%)

Base: 150

  • Top 1 Rank
  • Top 2 Rank
  • Top 3 Rank
  • Not Stated

Top Instruments in Equities (%) Base: 150

Residential Properties - TOP 81%

33% 37% 11% 19%

Commercial Properties - TOP 79%

45% 30% 4% 21%

ReIT (Real Estate Investment Trusts) - TOP 38%

3% 4% 31% 62%

InvITs (Infrastructure Investment Trusts) - TOP 21%

3% 5% 12% 79%

GIFT City - TOP 17%

2% 5% 9% 83%

Global Real Estate - TOP 12%

1% 2% 9% 88%

03. The Appeal of Commercial Real Estate, REITs and InvITs

Debt comes in as the third-preferred asset class making up, on average, 21% of the Ultra-HNI portfolio. Fixed deposits, debt mutual funds and government bonds are the top three instruments selected by Ultra-HNIs with fixed deposits appearing as the leading instrument.

1 in every 5

Ultra-HNIs plan to reduce debt in their portfolios

7 out of 10

Ultra-HNIs plan to increase their portfolio allocation to equities and real estate

Top Debt Instruments (%) Base: 150

  • a. Fixed Deposits
  • b. Government Bonds and Debentures
  • c. Corporate Bonds and Debentures
  • d. Mutual Funds
  • e. Personal Pension
  • f. Not Stated
  • g. Others

03. The Appeal of Commercial Real Estate, REITs and InvITs

Top Debt
Instruments (%)

Base: 150

  • Top 1 Rank
  • Top 2 Rank
  • Top 3 Rank
  • Not Stated

Preferred Alternative Assets (%)

Fixed Deposits - TOP 73%

35% 22% 16% 27%

Mutual Funds - TOP 63%

19% 25% 19% 37%

Government Bonds and Debentures - TOP 55%

12% 27% 14% 45%

Corporate Bonds and Debentures - TOP 52%

17% 9% 25% 48%

Personal Pension - TOP 10%

3% 2% 5% 90%

Others - TOP 1%

0% 0% 1% 99%

03. The Appeal of Commercial Real Estate, REITs and InvITs

Outlook on
Asset Classes (%)

  • Increase
  • Decrease
  • No Change

Outlook on Asset Classes (%)

Equity Base 149

70% 10% 19%

Real Estate Base 142

68% 12% 20%

Debt Base 141

41% 21% 38%

Alternate Assets Base 134

53% 12% 35%

TOPIC 4

The Ultra-HNIs Best Friend

04. The Ultra-HNIs Best Friend

Gold reached record highs in 2024, its prices driven by geopolitical conflicts and global inflationary pressure

More than half of the Ultra-HNIs surveyed intend to increase their exposure to alternative assets. Among alternative assets, bullion continues to be the most alluring, with 69% of Ultra-HNIs surveyed indicating a preference for it within the asset class.

~5

in every 10 Ultra-HNIs plan to increase their exposure to alternative assets

Preferred Alternative Assets (%) Base: 150

  • a. Gold/Silver Bullions
  • b. Private Equity/Venture Capital/Co-investing
  • c. Structured Products
  • d. Hedge Funds
  • e. Currency
  • f. Microfinance/Peer Lending
  • g. Impact/Societal Investment
  • h. Precious Stones
  • i. Other Commodities
  • j. Derivates
  • k. Artifacts
  • l. Not Stated

04. The Ultra-HNIs Best Friend

Preferred Alternative Assets (%)

Base: 150

  • Top 1
  • Top 2
  • Top 3
  • Not Stated

Gold/Silver Bullions - TOP 69%

31% 30% 8% 31%

Private Equity/Venture Capital/Co-investing - TOP 47%

15% 15% 17% 53%

Structured Products - TOP 37%

25% 7% 5% 63%

Hedge Funds - TOP 22%

8% 8% 6% 78%

Currency - TOP 20%

3% 9% 7% 80%

Microfinance/Peer Lending - TOP 20%

0% 1% 19% 80%

Impact/Societal Investment - TOP 12%

2% 5% 5% 88%

Precious Stones - TOP 11%

1% 5% 5% 89%

Other Commodities - TOP 6%

1% 1% 5% 94%

Derivates - TOP 3%

1% 0% 2% 97%

Artifacts - TOP 1%

0% 1% 0% 99%

TOPIC 5

Digital Assets – The Forbidden Fruit

05. Digital Assets – The Forbidden Fruit

Digital assets have emerged in recent years as a new asset class within the global financial marketplace. In India, they are now acknowledged and recognised as Virtual Digital Assets (VDA) within the tax code. 1 in every 5 Ultra-HNIs surveyed included VDAs in their portfolio. NFTs edged out Blockchain-based currencies as the preferred digital asset.

1 in every 5

Ultra-HNIs surveyed have Virtual Digital Assets in their portfolio

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