Alternative allocations now account for 40% to 45% of many family-office portfolios, up from 12% in 2024, a new EY and Julius Baer study finds.
Wealthy Indian investors are not abandoning real estate but are increasingly seeking income from real assets without buying more physical property, according to a new family-office study by EY and Julius Baer.
Traditional family-office portfolios were once anchored in equities, fixed deposits, gold and physical real estate, the report said. Those holdings are now diversifying into commercial real estate, infrastructure, commodities and alternatives.
Alternative allocations now account for 40% to 45% of many family-office portfolios, the report found. Those alternatives include private equity, venture capital, private credit, alternative investment funds, real-estate investment trusts and infrastructure investment trusts.
Family offices are moving toward more institutionally constructed portfolios, the study said. The share of families holding 20% to 30% alternative allocations is projected to rise from about 12% in 2024 to around 25% in coming years.
The shift reflects a desire for real-asset income without the management burden and concentration risk of direct property ownership. REITs and InvITs offer portfolio diversification and liquidity that physical holdings do not.
The EY and Julius Baer playbook did not specify the total capital under management represented in the survey or the number of family offices that participated in the study.
The Deployment Angle
Family Office Real Estate Daily Desk · our analysis, not the source's
For family offices considering Indian real-estate exposure, the data argue for a barbell approach: core direct holdings in gateway cities where control and asset management add value, paired with REIT and InvIT positions for diversification and liquidity.
The arithmetic matters. If 40% to 45% of a portfolio now sits in alternatives and that bucket includes private equity, venture capital and private credit alongside real assets, the effective real-estate allocation may be lower than historical norms. A family office with a 45% alternatives sleeve that splits evenly across four categories would hold roughly 11% in property-linked vehicles. That is material capital, but it is not the 20% to 30% direct real-estate weight that many families carried a decade ago.
Underwrite REIT and InvIT positions as permanent capital with a three- to five-year hold, not trading instruments. Liquidity is an advantage, but these are illiquid assets wrapped in a liquid structure. Price them for income, not for alpha. A 6% to 7% yield in a diversified Indian office REIT is a reasonable target; anything less demands a growth thesis you can model.
Avoid over-allocating to infrastructure trusts without clarity on regulatory and political risk. InvITs often carry government-linked counterparty exposure, and that concentration can move against you faster than a commercial lease default. If you cannot underwrite the sponsor and the offtake contract, the yield is not worth the headline number.
